Starting a family can be a momentous decision, and naturally, there is a lot more to consider than just the financial aspects alone. Even so, perceived financial barriers do hold many of us back from starting our family when we’d ideally like to, opting instead to work for a few more years and put together a bigger safety net for you, your partner, and your future children to fall back on if it’s needed. 

So how can you develop and maintain spend-savvy strategies as you prepare to start a family or whilst your children are still in their early developmental years? In this article, we aim to position you and your family for financial success so you can build healthy habits and inspire your kids to do the same as they grow older. 

Budget for your finances (i.e. mortgages and loans)

All families can expect to take on a certain amount of debt. Your major sources of debt will take one of two forms: a home loan, and a car loan. The home loan is self-explanatory, so let’s focus on the car loan. 

You’ll need a car to get your family around, whether for school, work or extracurricular activities. For big or even growing families in particular, investing in a reliable people mover is simply non-negotiable. And when you consider the improved safety ratings on newer vehicles, splurging on a new car feels extra sensible, to say the very least.

As you’d expect, car loans allow you to make smaller payments in either monthly or fortnightly sums. A complementary benefit of this type of loan is it typically improves your credit score for future financial decisions. In other words, taking out a car loan and managing it well may help you apply for larger loans (like a home loan) later down the line.

New car loans are typically available for vehicles that are up to three years old. If you’re looking to buy a secondhand vehicle, however, there are even used car loan options that are on offer for older models of up to twenty years old.

If you want to reduce your carbon footprint, you can even apply for a green car loan, a pure electric vehicle that reduces carbon emissions and cuts running costs. 

Consider making voluntary superannuation contributions

If you’re saving up for your pension by investing with a superannuation fund, then consider making top-up contributions wherever possible. Top-up contributions are contributions that are made to your super balance. This is especially a good idea if you’re working part-time, casual/contract or taking leave from the workforce. 

The benefit of investing in your superannuation now is simply that a greater investment today will naturally grow ever larger tomorrow. Now compound that with the next thirty-odd years, and you’ll have a nice little nest egg waiting for you come your retirement years. Small savings make a big difference, especially when that difference can mean increasing your retirement savings in the long haul. It might feel like a long, long time away, but starting early can certainly do no harm.

Create a family financial plan

Financial planning is all about making your goals as a family both actionable and achievable. If you have your hopes set on owning a home one day, or if you’re considering starting a business or taking a financial leap, family financial planning is an essential tool that will mark the steps you need to take to get there. This type of planning is all about setting goals and seeing them through. 

You can start by calculating your family budget so you’re on top of your expenses. Then determine what your financial goals are as a family - in particular, think about your long-term family goals, such as saving for university funds or paying off debt. Then allocate your goals to a percentage metric, such as the 50-30-20 rule or another money-saving strategy, and divide your savings amongst these percentages. 

Build an emergency fund

Following on from the previous tip, building up an emergency fund should be a priority for all new and expectant parents. This fund accounts for any unprecedented, unruly events, such as property damage or medical emergencies. This will save you from financial stress, or even tripping into debt as a result.

Thankfully, most diligent lifelong savers should already have a sizable emergency fund to their name. If that’s the case, then all you need to do is combine your assets with your partner to make sure that your family has access to those collective funds.

Once the funds have been combined, consider keeping your emergency fund in a separate savings account. That way, you can accrue interest on your fund and it can thus grow itself – a game changer for busy parents! You don’t need to fork out hundreds of dollars, either. Start small and build your wealth over time. 

Invest in insurance 

Insurance is important and should be considered and evaluated by every family to protect loved ones and their financial assets. 

There are different types of insurance. Below, we’ve compiled a list: 

• Life insurance ensures your family’s financial security in the event of your death is covered with a lump-sum payment. Both partners should consider this insurance type.

• Income protection insurance replaces your salary in the event of illness or injury which prevents you from working.

• Health insurance helps cover medical expenses and offers subsidies on pharmaceutical products.

• Home and contents insurance protects your home and assets from damage or theft-related incidents.

Manage your debt

Although it’s easy to procrastinate or forget about handling debt, managing your debt will lift the financial weight from your shoulders. Debt is a common challenge for young families, but it doesn't have to be a life-long plough through the trenches. 

When managing debt, ensure that you prioritise paying off high-interest debt (anything above the average interest rates for mortgages and student loans, for example) such as debt from a credit card. By eliminating the beast of your debt, you’re minimising interest costs. 

Assess your existing loans and explore refinancing options. This will make all the difference between paying higher or lower interest rates, the former of which could burden you with hundreds of thousands of dollars. 

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It is a fact of life that families must navigate the highs and lows of financial stability. By implementing small daily financial habits into your family’s life, not only are you advocating for your family’s financial independence, but you’re teaching your children to do the same. 

In the last year, around 9 million found themselves increasing their borrowing to tide them over for another month or two. Borrowing money from family and friends is often the most common form of borrowing and can often be interest-free and without any credit scoring or approval process. But it is important to understand the pros and cons since money between family and friends can compromise relationships. 

Pros Of Borrowing Funds From Family And Friends

Borrowing money from family and friends can often be a good idea when you need funds urgently. When unexpected circumstances do arise, family and friends may offer to support you out of goodwill and will often be able to help out quickly, providing you with whatever you need for the time being. Borrowing from family and friends also means you won’t be forced to pay back extra on your loan, as you may have to from a bank, payday lender or credit union. 

Banks and other lending facilitates often charge ridiculously high-interest rates, meaning that you risk not being able to repay the money borrowed within the pre-arranged time frame, therefore paying additional interest and being trapped in a vicious cycle. This can then lead to excessive debt, meaning that it was not worth borrowing the original money in the first place.

Family and friends may also encourage you to pay them back what you owe quickly, as they don’t want to risk not having their money returned. Consequently, borrowing from those around you may entice you to repay the funds as you don’t want to be in debt to people you see on a regular basis, whereas borrowing from a bank or large institution might mean you feel less pressure to repay the money as you don’t know where it has come from.

 Some families also lend their relatives money without the requirement that they ever pay it back. Many parents and grandparents set funds aside, saving money to pay for their children’s education, weddings, cars and house deposits. This can save their family from taking out loans with interest rates in the future and provide financial support through more difficult times.

Cons Of Borrowing From Family And Friends

Whilst family and friends may offer financial support in a time of need, it may not always be the best solution. Close relations may not demand that the money they have lent you should be repaid, leaving you feeling guilty and not wanting to ask them for financial aid in the future. 

“If repayment terms are too loose,” explains John Gauthier of Hoopla Loans, “this can create an uncomfortable atmosphere, with people expecting repayment within a certain timeframe. Things can get tricky if you do not repay when expected or if you cannot repay at all, this makes things extremely awkward. 

“Make no mistake, when it comes to money, things can get very tough even between close family members.”

Borrowing from those around you can also create animosity if you are embarrassed to explain your financial situation to them and ask for help. They can also refuse to lend money, leaving you with no option but to take out an alternative loan.

You need to protect yourself and your children, if you have any, during this process. A critical part of this is making sure your finances are protected as well.

The last thing you want to do is make a mistake that can cost you your home, savings, or retirement. Until your divorce is finalised, follow these three tips to keep your money safe. If you don’t, you may find paying for the next stage of your life to be a struggle.

Don’t Blow Your Budget

Now is not the time to reach into your joint checking account to splurge on a vacation, no matter how badly you need it. It’s okay to use your joint account for the usual expenses, but keep in mind every financial move you make is going to be under scrutiny. If a judge gets the impression you are trying to take more than your share, it could come back to haunt you later.

One big expense you’ll have that is out of the ordinary is a divorce lawyer. Your soon-to-be ex will have one, too. If your divorce is amicable, you may be able to come to an agreement about how much is fair for you to each take out of your accounts to use for this purpose.

If you are at each other’s throats and you can’t agree on anything, filing for a legal separation may be the best option. This would force you to come to an agreement about how you are allowed to use your money until your divorce is finalised.

It’s okay to use your joint account for the usual expenses, but keep in mind every financial move you make is going to be under scrutiny.

Know the Value of Your Assets

You and your ex need to evaluate and clarify your assets to make sure you know what they are and how much they are worth. This could include any of these types of property and investments:

• Your home
• Your bank accounts
• Any stocks or bonds
• Your pensions
• Your life insurance policies
• Any vacation homes
• The furnishings in your home
• The artwork you’ve collected
• Your appliances
• Your vehicles
• Any recreational vehicles
• Your boats
• Any small businesses you own

Once you’ve identified all of your assets, you’ll need to identify what belongs to you, what belongs to your ex, and what belongs to both of you. If you can’t agree how to divide the assets that belong to you both, this may be decided during mediation or negotiations in court.

Get an Attorney and a Financial Advisor

You may be considering skipping hiring an attorney because you are still on reasonably friendly terms and you believe you can handle negotiations yourselves. Divorce laws are complicated, and they differ from state to state, so it pays to follow the advice of specialist attorneys.

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An attorney can also make the divorce proceedings quicker and take some of the stress and burden off of you. You can let them handle the paperwork, negotiations, and anything else that is taking up so much of your time that you have no energy left for self-care.

A financial advisor is also critical during this time, especially if you aren’t very financially savvy or you have valuable assets. If your spouse has been handling most of the bills, you may not understand enough about your expenses to be sure you walk away with enough to start over.

Even if you and your ex agree on most things and you agree this is for the best, divorce can still be an emotional time. Having impartial professionals on your side who can speak in your best interest can make this process much easier for you both.

According to Ian Borman, partner at Winston & Strawn this has meant that, for businesses that aren’t well-known or well-placed, or perhaps under significant stress, securing finance has become more challenging than ever.

Below Ian discusses with Finance Monthly the growth in family offices that have been resorting more and more to direct investment, touching on the complexities surrounding direct investment but also the social and ethical benefits smaller businesses can gain.

Direct investment by individuals and family offices is far from a new concept. Decades ago, my grandfather, a solicitor in the North of England, managed a portfolio of small loans to local businesses for a widow. But in the past several years, the needs of private businesses for capital and of family offices for returns have combined to accelerate this area of the finance market.

Historically, this activity has been focused on the SME sector, which itself has played a larger and more significant role in economic growth than one might think. For instance, in the UK small and medium-sized enterprises account for 99.3% of all private sector businesses and employ approximately 16.3 million people. In 2018, UK SMEs delivered a combined annual turnover of £2 trillion, accounting for 52% of all private sector turnover. Many SMEs are conservatively run, with low leverage.

This powerful economic engine is now at risk of stalling; government figures estimate that the number of SMEs in the UK fell by 27,000 between 2017 and 2018. Slowing growth, combined with the implications of the pound’s uncertain strength, are forcing many SMEs to restructure or invest in improved efficiency. In an earlier day, banks provided a ready source of capital to meet these and other needs, but many traditional financial institutions are still facing capital pressures and have withdrawn from large parts of this sector of the market, especially early stage businesses and turnarounds. Institutional investors, for their part, inevitably end up focusing on larger opportunities.

In an earlier day, banks provided a ready source of capital to meet these and other needs, but many traditional financial institutions are still facing capital pressures and have withdrawn from large parts of this sector of the market, especially early stage businesses and turnarounds.

Meanwhile, family offices have been facing their own challenges. Traditional family office investment strategies focused on public bond and equity markets, and to a lesser extent on hedge funds and real estate. However, these investments no longer provide the returns they once did. In the search for higher yield, more and more family offices are thus looking toward the opportunities presented by direct investment.

Indeed, some family offices have taken to the private market with considerable enthusiasm. Because they are independent and less heavily regulated than banks, family offices can be much more flexible in their consideration of investments across enterprise size, geographies and asset classes. As they move toward more direct forms of investment, some family offices are focusing on sectors such as financial technology, or strategies like turnaround. Those offices are increasing their ability to evaluate and manage targeted investments by hiring specialists from banks and private equity firms.

In some cases, family offices are clubbing together, either in an ongoing arrangement or on a deal-by-deal basis, to create a critical mass of investment capital to justify employing a team of people and to provide discipline in the investment decision-making process. (This professionalism in managing SME investments can be seen in other sectors in which family offices have increased their presence, such as investments in sports clubs and oversight of other family assets, such as yachts, aircraft and art.) Family offices are also reviewing and evaluating their organisation, governance structures and support for family members to ensure that offices can successfully navigate the complexities attached to investing directly in specialist markets.

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The attraction of direct investment to family offices comes from more than just an alignment of capital. Making direct investments also allows family offices to take the hands-on approach they increasingly favor in selecting and managing their portfolios. This hands-on approach allows family offices to more closely align their investment decisions with the values of the families they represent, making investments in the sustainability space and impact investing particularly attractive. Direct investment also gives family offices the opportunity to leverage their network and expertise to support regional growth.

Family offices have made a serious commitment to direct investments, allowing them to invest in an innovative, creative, and socially conscious way and providing welcome news for the SME sector and the wider economy.

The Rothschild banking family was at one point the richest family on Earth and, unsurprisingly, today it is one of the most popular subjects of conspiracy theories. But just how much of what you might read online is true?

The Rothschild family came from Frankfurt, where the house they had lived in for generations was marked with the sign of the Red Shield (Roth + Schild). Like many Jewish families at the time, the Rothschilds were involved in finance, specifically currency exchange and collectible coins.

That was the business of the Rothschild patriarch: Mayer Rothschild. His success in this business attracted many wealthy customers, including Wilhelm, the future ruler of Hesse. Mayer managed Wilhelm's fortune and successfully protected it from Napoleon's invasion, for which he was greatly rewarded. Mayer had 5 sons, which he spread throughout Europe. Each established his own family and banking business in the five great European capitals at the time: London, Paris, Frankfurt, Vienna and Naples.

Throughout the 19th century the five brothers and (eventually) their heirs cooperated in numerous financing projects, lending money to governments and the nobility. By the end of the 19th century the wealth of just the French branch was the equivalent of $500 million today.

The 20th century, however, wasn't kind to the Rothschilds. The Naples and Frankfurt branches became effectively extinct when their last patriarchs produced no male heirs. A more sinister fate befell the branches in Vienna and Paris, who had the vast majority of their wealth confiscated in the course of the Second World War.

Only the branch in London survived intact, and today it is still a powerful force in Britain. At present the wealth of the Rothschilds is hidden in a series of shell companies originating in Switzerland. It is unclear exactly how rich they are, but by all visible measures they appear to have lost the majority of their richest during the 20th century.

Thus, ironically, one of the most popular subjects of conspiracy theories today has instead been on the decline for well over a century. Under the kind patronage of Nagabhushanam Peddi, Dan Supernault, Samuel Patterson, James Gallagher & Brett Gmoser.

Post holiday blues could hit hard for British holidaymakers this year as independent research recently released by CYBG’s digital banking service B reveals 33% of people experience challenges when they return home due to spending more than they can afford.

With the peak summer holiday season only a week away, B’s research predicts British tourists will spend an average of £1,175 per person on their getaway plus an additional £118 on pre-trip purchases. The bulk of pre-holiday spending goes on a holiday wardrobe, followed by toiletries such as sun cream. But British consumers are in a ‘spend now worry later’ mindset with the majority (57%) admitting they’re putting their holiday on a credit card, and a tenth saying they have no idea when they will be able to pay off the bill. More than half (53%) of those polled say they don’t save for flights while just under half reveal they don’t save for accommodation costs (47%) or spending money (48%).

Louise Hodges, Head of Consumer Communications at B says, “Holidays are something people find very hard to give up and that’s understandable. The benefit of time away from the office or home is well documented, so getting away should be encouraged. What should be kept in mind however is the importance of sticking to a budget and not ignoring the reality of how to pay for that break. If, as our research shows some people are relying on credit to afford household bills due to blowing the budget, there is a risk that all that unwinding on holiday could soon be undone when normal life resumes.”

Jane Anderson, Editor at Family Traveller says: “Holidays are one of the highest value purchases people make, but it is entirely possible to book two weeks in the sun without spending a fortune. All-inclusive holidays continue to grow in popularity - largely because it’s easy to retain control of spending with this option. In recent years there has been a real trend for luxury resorts and hotels to start offering all-inclusive which has widened the appeal”

“Destination-wise the Costa Brava in Spain is affordable this year – flights to Gerona airport are the best value. After falling out of favour for several years we are starting to see consumer confidence return in Egypt and Tunisia as holiday options – prices are still very competitive as the destinations continue to work hard to attract the British tourist.”

In terms of how British tourists prioritise holiday spending, the top outgoings this year are 1) dining out (28%) 2) drinking in bars/restaurants (21%) 3) activities i.e. day trips/ excursions and 4) food and drink to self-cater (18%). Just 13% of holidaymakers say they set a daily budget and don’t exceed it.

When asked if they could make savings/cutbacks to reduce the overall cost of their holiday, more than half (56%) say they could, but a quarter admit they won’t bother - either because they don’t care about the cost or they don’t want to make cutbacks whilst relaxing.

Louise added: “Reducing holiday spend doesn’t mean reducing holiday fun. Simple savvy habits like not getting currency at the airport (as it is invariably more expensive) and making sure your credit card doesn’t charge you on foreign transactions, lead to money-saving with zero impact on the holiday experience. B’s credit card has a 0% non-Sterling transaction fee and a low rate of 9.9% (variable) on purchases and balance transfers. It also links to the B app so users can tag credit card spending and see instantly where the money is being spent. We built our credit card to help people to get more summer for their spending.”

(Source: CYBG PLC)

The world's 500 largest family businesses account for a combined USD 6.8 trillion in annual sales, enough to be the third-largest economy in the world (surpassed only by the US and China) and employ nearly 25 million people. These and other findings were released in the biennial Global Family Business Index compiled by the University of St. Gallen, Switzerland, in cooperation with EY. The study highlights the 500 largest family businesses in the world by revenue.

Peter Englisch, EY Global Leader, Family Business Center of Excellence, says: "Behind a successful family business there is usually a story of hard work, dedication, inspiration and sacrifice. It may even be a tale of someone achieving great things and superior growth against incredible odds. Family businesses have the potential to be better, to differentiate themselves in the market, to be more agile in a changing environment, to invest more in innovation and to have superior attractiveness to talent. Family businesses in the US and Germany succeeded in realizing their full potential and became home to more than 2/3 of all Top 500 largest family businesses in the world."

The index reveals that by geography, Europe leads with 44.8% of the index companies calling the continent home, followed by 27.8% of family businesses domiciled in North America.

Thomas Zellweger, Chair of Family Business at the University of St. Gallen, says: "The prevalence of large family businesses in the US and Europe challenges the idea that the widely held and manager-run company should suppress all other forms of economic organization. Family businesses are thus a future-oriented way of organizing economic activity, and the businesses on the list may tell us how this is best achieved."

Consumer Products & Retail companies make up the largest share of the index with 40%, followed by Automotive & Transportation (10%) and Diversified Industrial Products (9%). Of the top 10 automakers, 4 are family-controlled companies. In contrast, only 3 family businesses on the list are predominantly active in banking.

(Source: EY)