A Guide to Family Financial Planning

For most people, the way money is handled has a lot to do with upbringing. In some people, the accumulation of wealth fulfills a need for security, and for others, it is a path to adventure and excitement. Below, we will discuss how the environment in which you were raised may have helped to shape your financial outlook.

Family Finance Types

Family FinanceA family’s view on a line of credit and other finances usually falls into one of the below categories, although some families blend two or more. These categories can be described as:

Conservative – Families take an analytic approach to decision making, moving cautiously and slowly before making investments. These families tend to guard every penny and take risk management very seriously.

Stable – This kind of family likes to keep things the way they are, and tends to resist situations that require rapid adaptability. Here, tradition is honored, and those who break from the norm are frowned upon.

Extroverted – This family financial culture focuses on harmony and relationship building. Families like these don’t pay much attention to the minutiae of financial decision making, and aren’t as inclined to adhere to procedures.

Entrepreneurial – Families like these are very focused on results, preferring to make financial decisions based on details. They move quickly once a decision is made, and work automatically to maintain autonomy and control.

The types described above are general, and children don’t always follow their parents’ example. In some cases, we do the opposite – for example, if your parents were very frugal, you may continue their penny-pinching ways, or buy what you want when the mood strikes.

Your Upbringing Shapes your Habits

In large families, you may see patterns regarding financial choices. Everyone has a financial family history, and in some cases, it’s so deeply ingrained that we don’t even realize it’s there. When we know more about this history, we can make conscious choices to avoid or reinforce related behaviors.

Starting the Conversation

To see how your spending habits can affect your future, you should talk to a Financial Planning firm. A financial advisor can give you common sense tips on having the “money talk” with your parents, children and spouse – no matter what financial culture your family has.

How a Financial Planner Can Help You Grow Your Wealth

As your wealth grows, it can become more time-consuming to manage it. While you are busy working and making money, it is important to make sure your money is working for you. If you lack the expertise or the time to research the best ways to invest your money, an experienced personal financial planner can help you.

You don’t need to have millions of dollars to benefit from the services of a financial planner. It may even be better to establish a relationship with a financial advisor early in your career. When you begin making wise investments early, you have a better chance of having the money you need to send your children to college, retire comfortably and leave an inheritance to your heirs when you die.

Financial Planning can help you at any stage of wealth. Whether you are struggling to pay your credit card bills and need help preparing a realistic budget for your family to avoid bankruptcy or you have inherited a large sum of money and need help choosing the right way to invest so the money can be used as it was intended, a financial planner can help become financial secure.

hire a financial plannerBefore you hire a financial planner, it is important to understand how they get paid. Some advisors are paid on commission. Some charge a flat or hourly fee. Others bill clients a percentage of the assets they manage. Many people prefer to pay a percentage of their assets because financial planners who use this fee structure have an incentive to grow their clients’ assets.

If you don’t know a lot about investing or you don’t want to take a lot of time to monitor your financial planner’s activities, choose an advisor who is a fiduciary. These professionals pledge to act in the best interest of their clients. A fiduciary must recommend investments that they know are right for you and will help you move toward your goals. Your advisor should take the time to understand your goals and hopes for your portfolio and take your individual needs into account as they manage your assets.