The best financial goals for young families (that actually work)

If your family’s budget is a little tight lately, you’re not alone. Young adults today face more financial stress than older generations did due to the rising cost of necessities. Home prices, for example, have increased by 1,045% since 1973. Childcare costs are around 283% higher today than they were in 1990.

In the face of those rising costs, meeting your family's financial goals might feel impossible. But with practical financial planning, clearly defined goals, and the right resources, you can achieve your financial resolutions even on a tight budget. This post will cover a few tips to set (and achieve) the best financial goals for young families in today's world. 

Start with short-term goals that build financial stability

Practical financial planning starts with covering the essentials. When you sit down to make a financial plan, identify your short-term goals first to establish financial stability. 

Examples of practical short-term goals include:

• Create a monthly budget: Establish a realistic monthly budget that covers your family’s needs and still allows you to save a portion of your paycheck. 

• Set up an emergency fund: Have enough money set aside to cover a medical or housing emergency. 

• Pay off high-interest debt: Pay off your credit cards and other high-interest loans first, so you can start building wealth.

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Plan mid-term goals that support family life

Next, it’s time to look a little further ahead. Achieving financial abundance is all about balancing your needs and wants. Work with your family to set goals that support your lifestyle while still allowing you to save. 

These mid-term goals will look a little different for every family. It all depends on your budget, family size, where you live, and what you want out of life. What matters most is that they are achievable. As you outline these goals, discuss realistic timelines and savings strategies that will help you meet them.

Here are a few examples of mid-term goals you might set as a family:

• Vacations: Consider small and large vacations you want to take in the next 2, 5, and 10 years so you can start budgeting accordingly.

• Home renovations: Set up a timeline for each improvement, starting with the most necessary.

• Education and extracurriculars: Plan for your kids’ sports, summer camps, after-school programs, and similar activities.

It’s important to include kids and teens in this planning process so they're better prepared to manage their money in the future. Greenlight’s chore-to-earn feature, which automates allowance payouts for their chores, is a great way to help kids plan and save for their own goals.

Build long-term family financial goals for generational security

Setting long-term goals — even if they seem impossibly far away — is key to building wealth in the future. 

Your long-term goals may shift as your family grows, and that’s okay. Check in with your partner and other family members at least once a year to make sure you know what you’re working toward. Set ideal timelines (again, it’s okay if these change) and discuss how much you can set aside each month to stay on track. 

Some examples of long-term financial planning include:

• College funds: It’s never too early to start saving for your kids’ education.

• Retirement plans: Consider when you want to retire and research the best savings account or investment account for your goals. This is also a great time to compare life insurance plans if you haven't already.

• Generational wealth: How will you pass on wealth to your children? Consider brokerage accounts, property, and other financial assets that will build generational wealth as your family grows. 

Your kids can start building toward their long-term plans today, too. The Greenlight app is a great tool to empower minors to make smarter financial decisions, offering accessible money-saving tools and visuals to introduce them to saving and investing.

How to set and track your goals effectively

The SMART framework can help you make your goals a reality. Every goal you set should be:

• Specific: Know exactly how much you need to save to reach each milestone. 

• Measurable: Don’t just hope you’re saving enough. Set up accounts or savings buckets to track your progress toward each goal.  

• Achievable: Work within your current budget, not a hypothetical future where you earn more money. If you do get that raise, great — you can always adjust your goals. 

• Relevant: Set goals that are relevant to your family’s future. For example, account for home costs in your area or the area you plan to move to. 

• Time-bound: Establish clear timelines for each goal. 

When it comes to actually saving, consider the 50/30/20 budgeting rule: 50% of your monthly budget should go to needs, 30% to wants, and 20% to your savings goals. 

It’s okay to adjust this template to account for rising costs of living. For example, if you need 70% of your budget to afford your needs, set aside 20% for wants and 10% for savings. What matters most is that you save at least a little every month. 

Another crucial tip: involve every family member. Make sure you and your partner are on the same page about your savings goals, and get your kids involved with tools like the Greenlight app, which allows families to track their savings in real time.

A sample 3-month financial goal plan you can follow

Here’s an example of a 3-month plan for a young family starting on the path toward financial wellness:

• Month 1: Build a $500 emergency fund. Discuss which costs you can cut that month to make it happen, then store the fund in a secure long-term savings account.

• Month 2: Pay off debt. Dedicate your monthly savings to cutting out $200 - $500 worth of debt, starting with your highest-interest accounts. 

• Month 3: Open a savings bucket with a financial planning tool like Greenlight. Dedicate this bucket to one of your mid-term goals, such as a vacation fund. 

This is just an example — the exact amount you set aside for your emergency fund or debt repayment can vary depending on your budget. It’s all about starting with what you have and building toward a better future. 

Take your first step toward financial confidence today

Times are tough, financially speaking. But that doesn’t mean young families can’t grow their wealth. It all comes down to setting achievable goals and working together as a family. 

As you begin your family financial planning journey, remember to use every resource available to you. Consider safeguarding your family’s finances with Greenlight Family Shield. It offers emergency alerts*, fraud monitoring**, and other features to help families safely manage their money. And, check out Greenlight's other tools to automate your finances or learn more about safe investments.

Remember, it’s never a bad time to start saving. The sooner you start, the more achievable your family’s financial goals will be. 

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