Establishing a Family’s Financial Priorities, according to a Financial Planner

When many think about money management, it is usually around investments and planning for retirement. However, there is more to it, especially for families. While saving money is important, it is not considered a top priority, according to one financial planner. Understanding your priorities will help you develop that plan for future financial success.

“A lot of people don’t get taught the mindset part of money. You think of money, and you go to maybe investments or something like that, but really money is a tool, not a goal,” said Joseph Oakley, host of the Enjoy More 30s podcast and a certified financial planner.

Oakley says understanding the money mindset is the first step. He says once you identify the things you want to do with your money, you can start developing a plan. He advises countless young families to look at protecting themselves, which Oakley says isn’t the most fun part of managing your finances. Think about the things you need to protect. Your home is one example where Oakley asks if it were to burn down, would you have enough money to rebuild? That would devastate your finances and your family.

Insuring your home is a requirement, but what’s not required but also important is life and disability insurance. Ask yourself what would happen if you became disabled or passed away. Many people get a little bit of life and disability insurance through their employer or choose to get some on the side, which will help protect their family in case of a catastrophic event.

Making sure to pay yourself is another point Oakley emphasizes when working with families and says it is essential for children to learn.

“You have a lot of expenses in life, but I’m sure you work really, really hard for your money. We all do, and so it kills me when I talk to people, and they’re giving all their money away to other people every single month,” he says.

Oakley is speaking about paying for monthly expenses, like your mortgage, cell phone, and grocery bill. He suggests at least 5%, but ideally, 10–15% of the money you make should be paid to yourself or saved.

He says, “Anything you put away toward yourself is a step in the right direction.”

Making insurance and investing in yourself top priorities equals being prepared for what life throws at you. Oakley says these tips are all forms of protection for the foundation of your life and why this is the first step he takes with people looking to plan for financial success.

To hear more financial advice from Joseph Oakley on other topics, like how to teach your children the financial educational skills of budgeting or to save for the future, check out our podcast, K12 On Learning, available wherever you download your podcasts.