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| URL | https://www.acg.aaa.com/connect/blogs/4c/money/family-financial-planning-made-easy | |||||||||
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| Meta Title | Family Financial Planning Made Easy | |||||||||
| Meta Description | Enhance your family's financial future with AAA's expert guidance. Discover strategic planning tips, from budgeting to saving for college, tailored for your needs. | |||||||||
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| Boilerpipe Text | Family financial planning isn’t
just
about managing money; it’s also about charting a course toward a secure and fulfilling future for your loved ones. It’s a
collaborative process
that requires open communication, shared goals and a strategic road map. This comprehensive guide will help you learn the tools to navigate the world of
family financial planning
, from setting realistic goals to implementing practical strategies for achieving them.
7 steps of financial planning
For some, starting a financial plan for their family can be intimidating because they don’t know where to take the first steps. Good news: AAA is here to help you on your family financial planning journey.
A
study by financial planning company Empower
found that 62% of Americans don’t talk about money. But the cornerstone of any financial plan is setting clear, well-defined goals. Here’s where open communication about money can get you started down the right path.
1. Find a family financial planning adviser
A family financial planner acts as a trusted adviser, guiding you toward achieving your financial goals. They offer personalized strategies, manage your investments and provide the peace of mind that comes from knowing your financial future is in good hands.
When you are looking for a certified financial planner, prioritize those who have experience working specifically with families. They’ll understand the unique challenges and opportunities that families face and can tailor their approach accordingly.
Remember, finding the right family financial planner is an investment in your future. By following these tips—and reaching out to one of AAA’s knowledgeable family financial planning experts—you will put your financial well-being above all else.
2. Create a financial plan
First things first: Start by brainstorming your short-, mid- and long-term financial goals. Short-term goals might include saving for an upcoming family vacation or a down payment on a new family vehicle. Mid-term goals could include funding a college education or home renovations. Long-term goals often mean saving for retirement or creating a legacy financial plan for future generations.
The milestones of a single person are very different from those of a couple or family. Your financial goals may include saving for the down payment for your first house or prioritizing paying off your student loans.
Once you’ve made a comprehensive list of your goals, prioritize them based on importance and urgency. This will help you allocate resources effectively and develop a road map for achieving each goal.
Â
3. Start with the basics
While most people have a desire to take control of their finances, they need an actionable place to start. Here are four tips that can help you create a monthly budget—and actually stick to it for the long term—so that you can accelerate meeting and exceeding your family financial goals.
Establish your income.
Before you can begin to create a budget, you need to know your financial baseline. Take stock of the pay that you actually receive—subtracting 401(k) contributions, health insurance premiums, taxes and other payroll deductions. If you’re paid a salary, your take-home income is easy to track. However, if your pay depends on unpredictable variables like hourly wages or commissions, look at past pay statements and determine a reasonable average monthly income. Err on the side of expecting lower paychecks and take unusually high amounts out of the equation.
Make a plan.
Most of your spending falls into one of three categories: needs, wants, and savings and debt repayment. While there are many schools of thought on budgeting, one of the most popular is the
50/30/20 budget
.
Track your spending.
The most difficult part of any monthly budget is sticking to it, and bad spending habits can be hard to break. Persistence and discipline are key, especially when you’re first starting out. Use free apps like
Mint
or
PocketGuard
to help you track what you’ve spent and stay in control.
Refine and adapt.
Perhaps you’re spending less on groceries than you expected. Or you’re driving more than you thought and need to adjust for higher gas prices. Make adjustments with your
financial goal
in mind—and avoid making your budget a wish list.
4. Think of the details
Avoid making a family budget you can’t stick to. It’s important to think about all of your family’s expenses when you’re putting one together. Your mortgage or rent and groceries are common expenses to include in a budget, but also factor in television subscription services, children’s dance lessons or saving for your next family vacation. It’s easy to overlook small costs of everyday family living, but these are the things that will slowly erode your budget.
It's also a good idea to organize a family meeting to discuss financial goals. Involve everyone, even young children, in the budgeting and planning process to foster a sense of ownership and shared responsibility. (Bonus—you’re also teaching great financial literacy to your children at a young age!)
5. Add an emergency fund
An emergency fund is a bank account with money saved to pay for large, unexpected expenses like unemployment, major home or car repairs, or unforeseen medical expenses. Think of your emergency fund as a buffer that helps keep you financially sound in a time of need and that helps you avoid having to rely on high-interest credit cards or loans.
Most people are confused about how much they should keep in an emergency fund. But the truth is that it depends on your unique financial situation. A good rule of thumb is starting out with three to six months of living expenses in your emergency fund.
6. Include college savings
While college costs may seem overwhelming, planning and using the right tools can ease the burden:
Invest in 529 plans:
Consider opening a 529 college savings plan, which is a tax-advantaged account specifically designed for education expenses. Contributions grow tax-free, and qualified withdrawals for education purposes are also tax-free. Many states offer additional tax benefits for contributions to 529 plans, too.
Start early:
The power of compound interest is your greatest ally. Starting a 529 plan early (or using a high-interest savings account), even with small contributions, allows the earnings to accumulate over time. Set up automatic transfers to ensure consistent saving.
Explore funding options:
Contributions to your college savings can come from various sources—parents, grandparents, other relatives and possibly even employers offering matching contributions. You can also start a
custodial Roth IRA for your kids
.Â
7. Think of other expenses
Creating a robust family financial plan goes beyond just the major expenses like mortgage payments and college savings. A comprehensive plan takes into account a variety of other costs that contribute to your overall financial picture. Your recurring monthly expenses form the backbone of your budget. Items like utilities (electricity, water, gas), internet, phone plans, subscriptions (streaming services, gym memberships) and transportation costs should all be included.
Your variable monthly expenses, like groceries, gas for vehicles, dining out, entertainment, personal care items, clothing and pet care will fluctuate from month to month depending on needs and habits. Don’t forget annual and semiannual expenses, such as car insurance, homeowners or renters insurance, property taxes, and subscriptions that renew less frequently. And don’t miss the hidden costs associated with major expenses. For example, for car ownership, consider including the costs of car maintenance or repairs.
Segment your financials for big milestones. Perhaps your financial goals include saving for the down payment on your first house, or perhaps you may want to consider buying your child their first car, paying for their wedding or helping them with a down payment on their first home. These may seem like long-term goals when your children are young, but the years go by quickly—the earlier you start planning and saving, the better.
Bonus: 8. Planning for the future
While having conversations about your
end-of-life plan
may not be something you look forward to, your family members will be incredibly grateful to know your wishes while you’re still here to tell them.
The first step in end-of-life estate planning should be creating a will. A will is a legal document that coordinates the disbursement of your assets and can appoint guardians for your minor children. It’s recommended that anyone over the age of 18 or who owns property have a will so they can communicate their last wishes clearly.
For families with children, it’s important to discuss who will have legal custody of the children if both parents pass away. This prevents confusion during an already difficult time. If you have life insurance, you should identify the beneficiary of your plan in your will. Life insurance helps you ensure that your spouse and children will be taken care of if something were to happen to you.
AAA makes family financial planning simple
Ready to jump-start your bright financial future? Book a meeting with a
AAA family financial planner
to get on the road to success, no matter where you are in your journey. Through your
AAA Membership
, you have access to savings tools like special CDs and IRAs that can help you achieve your financial goals.
Life Insurance Disclosure
This information is being provided for general informational purposes only. The Auto Club Group does not assume any liability in connection with providing this information.
Life insurance underwritten and annuities offered by AAA Life Insurance Company, Livonia, Michigan. AAA Life Insurance Company is licensed in all states except NY. CA Certificate of Authority #07861. Products and their features may not be available in all states.
AAA Life and its agents do not provide legal, financial, or tax advice. Therefore, you may wish to consult independent professional advice prior to the purchase of any contract.
This is a summary of product provisions and does not contain all of the benefits and exclusions. For complete terms of the insurance coverage or annuity, please contact your agent or refer to the policy/contract.
Annuities - LA
Annuities are not short-term products. During the surrender charge period, withdrawals exceeding 10% will be subject to a surrender charge that may be higher than fees associated with other types of financial products and may reduce principal. Withdrawals prior to 59½ may be subject to IRS penalties, separate from the annuity’s schedule of surrender charges.
EliteGuarantee Deferred Annuity - LAEGÂ
Contract Form Series: ICC11-4101/DA-4101 (In OR: ICC11-4101)
Platinum Bonus Annuity - LAPBÂ
Contract Form Series: ICC11-4111/DA-4111 (In OR: ICC11-4111)
Guaranteed Income Annuity - LAGIÂ
Contract Form Series: ICC14-4120/SPIA-4120 (In OR: ICC14-4120)
The payout amount you will receive is based on your individual circumstances, the options you select at the time of application and your initial premium payment.
For California residents: If you are 65 years of age or older, pursuant to California Insurance Code §789.8(b), we are required to advise you of the following. If you plan on the sale or liquidation of any stock, bond, IRA, certificate of deposit, mutual fund, annuity, or other asset to fund the purchase of this product, please be advised that you may be subject to some or all of the following as a result of the sale or liquidation: Adverse tax consequences; early withdrawal penalties; or other costs and/or penalties. You or your agent may also wish to consult independent legal or financial advice before selling or liquidating any assets and prior to the purchase of any life or annuity products being solicited, offered for sale, or sold.
Term Life Insurance - LT
Premiums are guaranteed. They are level for the premium period and increase annually thereafter. Any sample premiums are examples only and may vary based on your personal health history and underwriting guidelines. The answers provided to the health questions are used to determine eligibility for coverage. Not all applicants will qualify. Product and its features may not be available in all states.Â
Coverage ends at age 95
.
If insured is diagnosed with a terminal illness that will cause death in 12 mos. or less, up to 50% of the total benefit can be applied for, and used as insured chooses. The remaining benefit payable at death will be reduced by the Accelerated Death Benefit paid and any accrued and unpaid interest (8% annual interest rate applies). Receipt of Accelerated Death Benefits may affect eligibility for public assistance programs and may be taxable. Please consult the appropriate social service agency and seek the advice of tax counsel before applying for these funds. The Accelerated Death Benefit is not available if the terminal illness results from an intentionally self-inflicted injury. This benefit may not be available in all states.
Traditional Term - LTTÂ
Policy Form Series: ICC19-1801/1801 (In OR: ICC19-1801)
Group Direct TermÂ
Policy Form Series: GT8200
Individual Direct TermÂ
Policy Form Series: ICC16-1501
Universal Life Insurance – LULG
Health history, underwriting guidelines and the answers provided to health questions are used to determine approval for coverage. Not all applicants will qualify. Rates may vary.
Lifetime Universal Life Insurance - LULÂ
Health history, underwriting guidelines and the answers provided to health questions are used to determine approval for coverage. Not all applicants will qualify. Rates may vary.
Policy Form Series: ICC19-4701/4701 (In OR: ICC19-4701)
If insured is diagnosed with a terminal illness that will cause death in 12 mos. or less, up to 50% of the total benefit can be applied for, and used as insured chooses. The remaining benefit payable at death will be reduced by the Accelerated Death Benefit paid and any accrued and unpaid interest (7% annual interest rate applies). Receipt of Accelerated Death Benefits may affect eligibility for public assistance programs and may be taxable. Please consult the appropriate social service agency and seek the advice of tax counsel before applying for these funds. The Accelerated Death Benefit is not available if the terminal illness results from an intentionally self-inflicted injury. This benefit may not be available in all states.
Accumulator Universal Life Insurance - LULAÂ
Health history, underwriting guidelines and the answers provided to health questions are used to determine approval for coverage. Not all applicants will qualify. Rates may vary.
Policy Form Series: ICC19-3701/3701 (In OR: ICC19-3701)
If insured is diagnosed with a terminal illness that will cause death in 12 mos. or less, up to 50% of the total benefit can be applied for, and used as insured chooses. The remaining benefit payable at death will be reduced by the Accelerated Death Benefit paid and any accrued and unpaid interest (5% annual interest rate applies). Receipt of Accelerated Death Benefits may affect eligibility for public assistance programs and may be taxable. Please consult the appropriate social service agency and seek the advice of tax counsel before applying for these funds. The Accelerated Death Benefit is not available if the terminal illness results from an intentionally self-inflicted injury. This benefit may not be available in all states.
Whole Life Insurance
Whole Life InsuranceÂ
(for coverage amounts of $30,000 or more) -Â
LWLÂ
Policy Form Series: ICC18-5601/5601 (In OR: ICC18-5601)
Health history, underwriting guidelines and the answers provided to health questions are used to determine approval for coverage. Not all applicants will qualify. Rates may vary.
If insured is diagnosed with a terminal illness that will cause death in 12 mos. or less, up to 50% of the total benefit can be applied for, and used as insured chooses. The remaining benefit payable at death will be reduced by the Accelerated Death Benefit paid and any accrued and unpaid interest (8% annual interest rate applies). Receipt of Accelerated Death Benefits may affect eligibility for public assistance programs and may be taxable. Please consult the appropriate social service agency and seek the advice of tax counsel before applying for these funds. The Accelerated Death Benefit is not available if the terminal illness results from an intentionally self-inflicted injury. This benefit may not be available in all states.
Rapid Issue Whole Life InsuranceÂ
(for coverage amounts of $25,000 or less) -Â
LRIWLÂ
Policy Form Series ICC20-7001/7001 (In OR: ICC20-7001)
Responses to the application will be used to determine approval for coverage. Not all applicants will qualify.
This Whole Life policy is referred to as graded benefit whole life insurance.Â
If you suffer a non-accidental death within the first two years of coverage, your beneficiaries will get 100% of the base premiums you paid, plus 35%.Â
After two years, the total amount of your coverage is paid for death due to any cause.
After the first two years of coverage, if insured is diagnosed with a terminal illness that will cause death in 12 mos. or less, up to 50% of the total benefit can be applied for, and used as insured chooses. The remaining benefit payable at death will be reduced by the Accelerated Death Benefit paid and any accrued and unpaid interest (8% annual interest rate applies). Receipt of Accelerated Death Benefits may affect eligibility for public assistance programs and may be taxable. Please consult the appropriate social service agency and seek the advice of tax counsel before applying for these funds. The Accelerated Death Benefit is not available if the terminal illness results from an intentionally self-inflicted injury. This benefit may not be available in all states.
Guaranteed Issue Whole Life Insurance - LGIWLÂ
Policy Form Series: ICC16-6301/GWL6301 (In OR: ICC16-6301)
The maximum amount of Guaranteed Issue Whole Life insurance coverage per insured is $25,000.00. Subject to age requirements and policy limit restrictions.
This Guaranteed Issue Whole Life policy is referred to as graded benefit whole life insurance.Â
If you suffer a non-accidental death within the first two years of coverage, your beneficiaries will get 100% of the level monthly premiums you paid, plus 30%.Â
After two years, the total amount of your coverage is paid for death due to any cause.
If you are a California resident 65 years of age or older, we are required to advise you of the following. The sale or liquidation of any stock, bond, IRA, certificate of deposit, mutual fund, annuity, or other asset to fund the purchase of this product may have tax consequences, early withdrawal penalties, or other costs or penalties as a result of the sale or liquidation. You may wish to consult independent legal or financial advice before selling or liquidating any assets and prior to the purchase of any life or annuity products being solicited, offered for sale, or sold. | |||||||||
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4. Family Financial Planning Made Easy
money
# Family Financial Planning Made Easy
[David Monforton](https://www.acg.aaa.com/connect/blogs/authors)
November 11, 2024
8 Min Read
[](https://www.facebook.com/sharer/sharer.php?u=https://www.acg.aaa.com/connect/blogs/4c/money/family-financial-planning-made-easy) [](<mailto:?subject=Family Financial Planning Made Easy&body=I thought you would like this - https://www.acg.aaa.com/connect/blogs/4c/money/family-financial-planning-made-easy>) [](https://www.linkedin.com/shareArticle?mini=true&url=https://www.acg.aaa.com/connect/blogs/4c/money/family-financial-planning-made-easy) [](https://www.acg.aaa.com/connect/blogs/4c/money/family-financial-planning-made-easy)
Family financial planning isn’t *just* about managing money; it’s also about charting a course toward a secure and fulfilling future for your loved ones. It’s a [collaborative process](https://acg.aaa.com/connect/blogs/4c/money/couples-guide-to-sharing-finances-and-budgets) that requires open communication, shared goals and a strategic road map. This comprehensive guide will help you learn the tools to navigate the world of [family financial planning](https://acg.aaa.com/connect/blogs/4c/money/smart-family-financial-planning-dos-and-donts), from setting realistic goals to implementing practical strategies for achieving them.
## **7 steps of financial planning**
For some, starting a financial plan for their family can be intimidating because they don’t know where to take the first steps. Good news: AAA is here to help you on your family financial planning journey.
A [study by financial planning company Empower](https://www.empower.com/the-currency/money/money-talks) found that 62% of Americans don’t talk about money. But the cornerstone of any financial plan is setting clear, well-defined goals. Here’s where open communication about money can get you started down the right path.
### 1\. Find a family financial planning adviser
A family financial planner acts as a trusted adviser, guiding you toward achieving your financial goals. They offer personalized strategies, manage your investments and provide the peace of mind that comes from knowing your financial future is in good hands.
When you are looking for a certified financial planner, prioritize those who have experience working specifically with families. They’ll understand the unique challenges and opportunities that families face and can tailor their approach accordingly.
Remember, finding the right family financial planner is an investment in your future. By following these tips—and reaching out to one of AAA’s knowledgeable family financial planning experts—you will put your financial well-being above all else.
### 2\. Create a financial plan
First things first: Start by brainstorming your short-, mid- and long-term financial goals. Short-term goals might include saving for an upcoming family vacation or a down payment on a new family vehicle. Mid-term goals could include funding a college education or home renovations. Long-term goals often mean saving for retirement or creating a legacy financial plan for future generations.
The milestones of a single person are very different from those of a couple or family. Your financial goals may include saving for the down payment for your first house or prioritizing paying off your student loans.
Once you’ve made a comprehensive list of your goals, prioritize them based on importance and urgency. This will help you allocate resources effectively and develop a road map for achieving each goal.
***
### 3\. Start with the basics
While most people have a desire to take control of their finances, they need an actionable place to start. Here are four tips that can help you create a monthly budget—and actually stick to it for the long term—so that you can accelerate meeting and exceeding your family financial goals.
1. **Establish your income.** Before you can begin to create a budget, you need to know your financial baseline. Take stock of the pay that you actually receive—subtracting 401(k) contributions, health insurance premiums, taxes and other payroll deductions. If you’re paid a salary, your take-home income is easy to track. However, if your pay depends on unpredictable variables like hourly wages or commissions, look at past pay statements and determine a reasonable average monthly income. Err on the side of expecting lower paychecks and take unusually high amounts out of the equation.
2. **Make a plan.** Most of your spending falls into one of three categories: needs, wants, and savings and debt repayment. While there are many schools of thought on budgeting, one of the most popular is the [50/30/20 budget](https://www.nerdwallet.com/article/finance/nerdwallet-budget-calculator).
3. **Track your spending.** The most difficult part of any monthly budget is sticking to it, and bad spending habits can be hard to break. Persistence and discipline are key, especially when you’re first starting out. Use free apps like [Mint](https://mint.intuit.com/) or [PocketGuard](https://pocketguard.com/) to help you track what you’ve spent and stay in control.
4. **Refine and adapt.** Perhaps you’re spending less on groceries than you expected. Or you’re driving more than you thought and need to adjust for higher gas prices. Make adjustments with your [financial goal](https://acg.aaa.com/connect/blogs/4c/insurance/answers-about-annuities) in mind—and avoid making your budget a wish list.
#### Take control of your financial future with these financial planning do’s and don’ts.
[Learn more ‍](https://acg.aaa.com/connect/blogs/4c/money/smart-family-financial-planning-dos-and-donts)
### 4\. Think of the details
Avoid making a family budget you can’t stick to. It’s important to think about all of your family’s expenses when you’re putting one together. Your mortgage or rent and groceries are common expenses to include in a budget, but also factor in television subscription services, children’s dance lessons or saving for your next family vacation. It’s easy to overlook small costs of everyday family living, but these are the things that will slowly erode your budget.
It's also a good idea to organize a family meeting to discuss financial goals. Involve everyone, even young children, in the budgeting and planning process to foster a sense of ownership and shared responsibility. (Bonus—you’re also teaching great financial literacy to your children at a young age!)
#### Newlyweds: 6 Tips To Help You Reach Your Financial Goals
[Learn more‍](https://acg.aaa.com/connect/blogs/4c/money/tips-to-help-reach-your-financial-goals)
***
### 5\. Add an emergency fund
An emergency fund is a bank account with money saved to pay for large, unexpected expenses like unemployment, major home or car repairs, or unforeseen medical expenses. Think of your emergency fund as a buffer that helps keep you financially sound in a time of need and that helps you avoid having to rely on high-interest credit cards or loans.
Most people are confused about how much they should keep in an emergency fund. But the truth is that it depends on your unique financial situation. A good rule of thumb is starting out with three to six months of living expenses in your emergency fund.
### 6\. Include college savings
While college costs may seem overwhelming, planning and using the right tools can ease the burden:
- **Invest in 529 plans:** Consider opening a 529 college savings plan, which is a tax-advantaged account specifically designed for education expenses. Contributions grow tax-free, and qualified withdrawals for education purposes are also tax-free. Many states offer additional tax benefits for contributions to 529 plans, too.
- **Start early:** The power of compound interest is your greatest ally. Starting a 529 plan early (or using a high-interest savings account), even with small contributions, allows the earnings to accumulate over time. Set up automatic transfers to ensure consistent saving.
- **Explore funding options:** Contributions to your college savings can come from various sources—parents, grandparents, other relatives and possibly even employers offering matching contributions. You can also start a [custodial Roth IRA for your kids](https://acg.aaa.com/connect/blogs/4c/money/how-and-when-to-start-a-custodial-roth-ira-for-kids).
#### Quiz: Will These Financial Decisions Improve Your Credit Score?
[Learn more‍](https://acg.aaa.com/connect/blogs/4c/money/improve-your-credit-score)
### 7\. Think of other expenses
Creating a robust family financial plan goes beyond just the major expenses like mortgage payments and college savings. A comprehensive plan takes into account a variety of other costs that contribute to your overall financial picture. Your recurring monthly expenses form the backbone of your budget. Items like utilities (electricity, water, gas), internet, phone plans, subscriptions (streaming services, gym memberships) and transportation costs should all be included.
Your variable monthly expenses, like groceries, gas for vehicles, dining out, entertainment, personal care items, clothing and pet care will fluctuate from month to month depending on needs and habits. Don’t forget annual and semiannual expenses, such as car insurance, homeowners or renters insurance, property taxes, and subscriptions that renew less frequently. And don’t miss the hidden costs associated with major expenses. For example, for car ownership, consider including the costs of car maintenance or repairs.
Segment your financials for big milestones. Perhaps your financial goals include saving for the down payment on your first house, or perhaps you may want to consider buying your child their first car, paying for their wedding or helping them with a down payment on their first home. These may seem like long-term goals when your children are young, but the years go by quickly—the earlier you start planning and saving, the better.
***
***
### Bonus: 8. Planning for the future
While having conversations about your [end-of-life plan](https://acg.aaa.com/connect/blogs/4c/insurance/life-insurance-myths-common-misconceptions) may not be something you look forward to, your family members will be incredibly grateful to know your wishes while you’re still here to tell them.
The first step in end-of-life estate planning should be creating a will. A will is a legal document that coordinates the disbursement of your assets and can appoint guardians for your minor children. It’s recommended that anyone over the age of 18 or who owns property have a will so they can communicate their last wishes clearly.
For families with children, it’s important to discuss who will have legal custody of the children if both parents pass away. This prevents confusion during an already difficult time. If you have life insurance, you should identify the beneficiary of your plan in your will. Life insurance helps you ensure that your spouse and children will be taken care of if something were to happen to you.
## **AAA makes family financial planning simple**
Ready to jump-start your bright financial future? Book a meeting with a [AAA family financial planner](https://aaa.com/banking) to get on the road to success, no matter where you are in your journey. Through your [AAA Membership](https://aaa.com/join), you have access to savings tools like special CDs and IRAs that can help you achieve your financial goals.
### Let us help you with your money goals
Talk with AAA’s insurance and banking experts to start your financial planning off on the right foot.
[Connect today‍](https://aaa.com/banking)
#### Banking Disclosure
Banking Products are offered by Grasshopper Bank, N.A. Member FDIC Equal Credit Opportunity Lender. \[*Member FDIC*\]
**AAA-Member Verification & Product Eligibility**
By applying for a AAA Banking deposit account, you acknowledge and agree that if you select a AAA-member product, your AAA membership status with Auto Club Group (ACG) will be validated at the time of account opening and periodically thereafter. If your AAA membership cannot be validated or your membership status changes, your account may be moved to a non-member product with different terms, including but not limited to a lower Annual Percentage Yield (APY) and the removal of other AAA member-only benefits. If this occurs, you will receive a notification regarding the change in the product and applicable terms. If you believe your AAA Membership status was incorrectly validated or that you have been placed in the incorrect product, please contact us to review and correct your status.
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**Life Insurance Disclosure**
*This information is being provided for general informational purposes only. The Auto Club Group does not assume any liability in connection with providing this information.*
Life insurance underwritten and annuities offered by AAA Life Insurance Company, Livonia, Michigan. AAA Life Insurance Company is licensed in all states except NY. CA Certificate of Authority \#07861. Products and their features may not be available in all states.
AAA Life and its agents do not provide legal, financial, or tax advice. Therefore, you may wish to consult independent professional advice prior to the purchase of any contract.
**This is a summary of product provisions and does not contain all of the benefits and exclusions. For complete terms of the insurance coverage or annuity, please contact your agent or refer to the policy/contract.**
**Annuities - LA**
Annuities are not short-term products. During the surrender charge period, withdrawals exceeding 10% will be subject to a surrender charge that may be higher than fees associated with other types of financial products and may reduce principal. Withdrawals prior to 59½ may be subject to IRS penalties, separate from the annuity’s schedule of surrender charges.
**EliteGuarantee Deferred Annuity - LAEG** Contract Form Series: ICC11-4101/DA-4101 (In OR: ICC11-4101)
**Platinum Bonus Annuity - LAPB** Contract Form Series: ICC11-4111/DA-4111 (In OR: ICC11-4111)
**Guaranteed Income Annuity - LAGI** Contract Form Series: ICC14-4120/SPIA-4120 (In OR: ICC14-4120)
The payout amount you will receive is based on your individual circumstances, the options you select at the time of application and your initial premium payment.
For California residents: If you are 65 years of age or older, pursuant to California Insurance Code §789.8(b), we are required to advise you of the following. If you plan on the sale or liquidation of any stock, bond, IRA, certificate of deposit, mutual fund, annuity, or other asset to fund the purchase of this product, please be advised that you may be subject to some or all of the following as a result of the sale or liquidation: Adverse tax consequences; early withdrawal penalties; or other costs and/or penalties. You or your agent may also wish to consult independent legal or financial advice before selling or liquidating any assets and prior to the purchase of any life or annuity products being solicited, offered for sale, or sold.
**Term Life Insurance - LT**
Premiums are guaranteed. They are level for the premium period and increase annually thereafter. Any sample premiums are examples only and may vary based on your personal health history and underwriting guidelines. The answers provided to the health questions are used to determine eligibility for coverage. Not all applicants will qualify. Product and its features may not be available in all states. **Coverage ends at age 95**.
If insured is diagnosed with a terminal illness that will cause death in 12 mos. or less, up to 50% of the total benefit can be applied for, and used as insured chooses. The remaining benefit payable at death will be reduced by the Accelerated Death Benefit paid and any accrued and unpaid interest (8% annual interest rate applies). Receipt of Accelerated Death Benefits may affect eligibility for public assistance programs and may be taxable. Please consult the appropriate social service agency and seek the advice of tax counsel before applying for these funds. The Accelerated Death Benefit is not available if the terminal illness results from an intentionally self-inflicted injury. This benefit may not be available in all states.
**Traditional Term - LTT** Policy Form Series: ICC19-1801/1801 (In OR: ICC19-1801)
**Group Direct Term** Policy Form Series: GT8200
**Individual Direct Term** Policy Form Series: ICC16-1501
**Universal Life Insurance – LULG**
Health history, underwriting guidelines and the answers provided to health questions are used to determine approval for coverage. Not all applicants will qualify. Rates may vary.
**Lifetime Universal Life Insurance - LUL** Health history, underwriting guidelines and the answers provided to health questions are used to determine approval for coverage. Not all applicants will qualify. Rates may vary.
Policy Form Series: ICC19-4701/4701 (In OR: ICC19-4701)
If insured is diagnosed with a terminal illness that will cause death in 12 mos. or less, up to 50% of the total benefit can be applied for, and used as insured chooses. The remaining benefit payable at death will be reduced by the Accelerated Death Benefit paid and any accrued and unpaid interest (7% annual interest rate applies). Receipt of Accelerated Death Benefits may affect eligibility for public assistance programs and may be taxable. Please consult the appropriate social service agency and seek the advice of tax counsel before applying for these funds. The Accelerated Death Benefit is not available if the terminal illness results from an intentionally self-inflicted injury. This benefit may not be available in all states.
**Accumulator Universal Life Insurance - LULA** Health history, underwriting guidelines and the answers provided to health questions are used to determine approval for coverage. Not all applicants will qualify. Rates may vary.
Policy Form Series: ICC19-3701/3701 (In OR: ICC19-3701)
If insured is diagnosed with a terminal illness that will cause death in 12 mos. or less, up to 50% of the total benefit can be applied for, and used as insured chooses. The remaining benefit payable at death will be reduced by the Accelerated Death Benefit paid and any accrued and unpaid interest (5% annual interest rate applies). Receipt of Accelerated Death Benefits may affect eligibility for public assistance programs and may be taxable. Please consult the appropriate social service agency and seek the advice of tax counsel before applying for these funds. The Accelerated Death Benefit is not available if the terminal illness results from an intentionally self-inflicted injury. This benefit may not be available in all states.
**Whole Life Insurance**
**Whole Life Insurance** *(for coverage amounts of \$30,000 or more) -* **LWL** Policy Form Series: ICC18-5601/5601 (In OR: ICC18-5601)
Health history, underwriting guidelines and the answers provided to health questions are used to determine approval for coverage. Not all applicants will qualify. Rates may vary.
If insured is diagnosed with a terminal illness that will cause death in 12 mos. or less, up to 50% of the total benefit can be applied for, and used as insured chooses. The remaining benefit payable at death will be reduced by the Accelerated Death Benefit paid and any accrued and unpaid interest (8% annual interest rate applies). Receipt of Accelerated Death Benefits may affect eligibility for public assistance programs and may be taxable. Please consult the appropriate social service agency and seek the advice of tax counsel before applying for these funds. The Accelerated Death Benefit is not available if the terminal illness results from an intentionally self-inflicted injury. This benefit may not be available in all states.
**Rapid Issue Whole Life Insurance** *(for coverage amounts of \$25,000 or less) -* **LRIWL** Policy Form Series ICC20-7001/7001 (In OR: ICC20-7001)
Responses to the application will be used to determine approval for coverage. Not all applicants will qualify.
This Whole Life policy is referred to as graded benefit whole life insurance. **If you suffer a non-accidental death within the first two years of coverage, your beneficiaries will get 100% of the base premiums you paid, plus 35%.** After two years, the total amount of your coverage is paid for death due to any cause.
After the first two years of coverage, if insured is diagnosed with a terminal illness that will cause death in 12 mos. or less, up to 50% of the total benefit can be applied for, and used as insured chooses. The remaining benefit payable at death will be reduced by the Accelerated Death Benefit paid and any accrued and unpaid interest (8% annual interest rate applies). Receipt of Accelerated Death Benefits may affect eligibility for public assistance programs and may be taxable. Please consult the appropriate social service agency and seek the advice of tax counsel before applying for these funds. The Accelerated Death Benefit is not available if the terminal illness results from an intentionally self-inflicted injury. This benefit may not be available in all states.
**Guaranteed Issue Whole Life Insurance - LGIWL** Policy Form Series: ICC16-6301/GWL6301 (In OR: ICC16-6301)
The maximum amount of Guaranteed Issue Whole Life insurance coverage per insured is \$25,000.00. Subject to age requirements and policy limit restrictions.
This Guaranteed Issue Whole Life policy is referred to as graded benefit whole life insurance. **If you suffer a non-accidental death within the first two years of coverage, your beneficiaries will get 100% of the level monthly premiums you paid, plus 30%.** After two years, the total amount of your coverage is paid for death due to any cause.
If you are a California resident 65 years of age or older, we are required to advise you of the following. The sale or liquidation of any stock, bond, IRA, certificate of deposit, mutual fund, annuity, or other asset to fund the purchase of this product may have tax consequences, early withdrawal penalties, or other costs or penalties as a result of the sale or liquidation. You may wish to consult independent legal or financial advice before selling or liquidating any assets and prior to the purchase of any life or annuity products being solicited, offered for sale, or sold.
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| Readable Markdown | Family financial planning isn’t *just* about managing money; it’s also about charting a course toward a secure and fulfilling future for your loved ones. It’s a [collaborative process](https://acg.aaa.com/connect/blogs/4c/money/couples-guide-to-sharing-finances-and-budgets) that requires open communication, shared goals and a strategic road map. This comprehensive guide will help you learn the tools to navigate the world of [family financial planning](https://acg.aaa.com/connect/blogs/4c/money/smart-family-financial-planning-dos-and-donts), from setting realistic goals to implementing practical strategies for achieving them.
## **7 steps of financial planning**
For some, starting a financial plan for their family can be intimidating because they don’t know where to take the first steps. Good news: AAA is here to help you on your family financial planning journey.
A [study by financial planning company Empower](https://www.empower.com/the-currency/money/money-talks) found that 62% of Americans don’t talk about money. But the cornerstone of any financial plan is setting clear, well-defined goals. Here’s where open communication about money can get you started down the right path.
### 1\. Find a family financial planning adviser
A family financial planner acts as a trusted adviser, guiding you toward achieving your financial goals. They offer personalized strategies, manage your investments and provide the peace of mind that comes from knowing your financial future is in good hands.
When you are looking for a certified financial planner, prioritize those who have experience working specifically with families. They’ll understand the unique challenges and opportunities that families face and can tailor their approach accordingly.
Remember, finding the right family financial planner is an investment in your future. By following these tips—and reaching out to one of AAA’s knowledgeable family financial planning experts—you will put your financial well-being above all else.
### 2\. Create a financial plan
First things first: Start by brainstorming your short-, mid- and long-term financial goals. Short-term goals might include saving for an upcoming family vacation or a down payment on a new family vehicle. Mid-term goals could include funding a college education or home renovations. Long-term goals often mean saving for retirement or creating a legacy financial plan for future generations.
The milestones of a single person are very different from those of a couple or family. Your financial goals may include saving for the down payment for your first house or prioritizing paying off your student loans.
Once you’ve made a comprehensive list of your goals, prioritize them based on importance and urgency. This will help you allocate resources effectively and develop a road map for achieving each goal.
### 3\. Start with the basics
While most people have a desire to take control of their finances, they need an actionable place to start. Here are four tips that can help you create a monthly budget—and actually stick to it for the long term—so that you can accelerate meeting and exceeding your family financial goals.
1. **Establish your income.** Before you can begin to create a budget, you need to know your financial baseline. Take stock of the pay that you actually receive—subtracting 401(k) contributions, health insurance premiums, taxes and other payroll deductions. If you’re paid a salary, your take-home income is easy to track. However, if your pay depends on unpredictable variables like hourly wages or commissions, look at past pay statements and determine a reasonable average monthly income. Err on the side of expecting lower paychecks and take unusually high amounts out of the equation.
2. **Make a plan.** Most of your spending falls into one of three categories: needs, wants, and savings and debt repayment. While there are many schools of thought on budgeting, one of the most popular is the [50/30/20 budget](https://www.nerdwallet.com/article/finance/nerdwallet-budget-calculator).
3. **Track your spending.** The most difficult part of any monthly budget is sticking to it, and bad spending habits can be hard to break. Persistence and discipline are key, especially when you’re first starting out. Use free apps like [Mint](https://mint.intuit.com/) or [PocketGuard](https://pocketguard.com/) to help you track what you’ve spent and stay in control.
4. **Refine and adapt.** Perhaps you’re spending less on groceries than you expected. Or you’re driving more than you thought and need to adjust for higher gas prices. Make adjustments with your [financial goal](https://acg.aaa.com/connect/blogs/4c/insurance/answers-about-annuities) in mind—and avoid making your budget a wish list.
### 4\. Think of the details
Avoid making a family budget you can’t stick to. It’s important to think about all of your family’s expenses when you’re putting one together. Your mortgage or rent and groceries are common expenses to include in a budget, but also factor in television subscription services, children’s dance lessons or saving for your next family vacation. It’s easy to overlook small costs of everyday family living, but these are the things that will slowly erode your budget.
It's also a good idea to organize a family meeting to discuss financial goals. Involve everyone, even young children, in the budgeting and planning process to foster a sense of ownership and shared responsibility. (Bonus—you’re also teaching great financial literacy to your children at a young age!)
### 5\. Add an emergency fund
An emergency fund is a bank account with money saved to pay for large, unexpected expenses like unemployment, major home or car repairs, or unforeseen medical expenses. Think of your emergency fund as a buffer that helps keep you financially sound in a time of need and that helps you avoid having to rely on high-interest credit cards or loans.
Most people are confused about how much they should keep in an emergency fund. But the truth is that it depends on your unique financial situation. A good rule of thumb is starting out with three to six months of living expenses in your emergency fund.
### 6\. Include college savings
While college costs may seem overwhelming, planning and using the right tools can ease the burden:
- **Invest in 529 plans:** Consider opening a 529 college savings plan, which is a tax-advantaged account specifically designed for education expenses. Contributions grow tax-free, and qualified withdrawals for education purposes are also tax-free. Many states offer additional tax benefits for contributions to 529 plans, too.
- **Start early:** The power of compound interest is your greatest ally. Starting a 529 plan early (or using a high-interest savings account), even with small contributions, allows the earnings to accumulate over time. Set up automatic transfers to ensure consistent saving.
- **Explore funding options:** Contributions to your college savings can come from various sources—parents, grandparents, other relatives and possibly even employers offering matching contributions. You can also start a [custodial Roth IRA for your kids](https://acg.aaa.com/connect/blogs/4c/money/how-and-when-to-start-a-custodial-roth-ira-for-kids).
### 7\. Think of other expenses
Creating a robust family financial plan goes beyond just the major expenses like mortgage payments and college savings. A comprehensive plan takes into account a variety of other costs that contribute to your overall financial picture. Your recurring monthly expenses form the backbone of your budget. Items like utilities (electricity, water, gas), internet, phone plans, subscriptions (streaming services, gym memberships) and transportation costs should all be included.
Your variable monthly expenses, like groceries, gas for vehicles, dining out, entertainment, personal care items, clothing and pet care will fluctuate from month to month depending on needs and habits. Don’t forget annual and semiannual expenses, such as car insurance, homeowners or renters insurance, property taxes, and subscriptions that renew less frequently. And don’t miss the hidden costs associated with major expenses. For example, for car ownership, consider including the costs of car maintenance or repairs.
Segment your financials for big milestones. Perhaps your financial goals include saving for the down payment on your first house, or perhaps you may want to consider buying your child their first car, paying for their wedding or helping them with a down payment on their first home. These may seem like long-term goals when your children are young, but the years go by quickly—the earlier you start planning and saving, the better.
### Bonus: 8. Planning for the future
While having conversations about your [end-of-life plan](https://acg.aaa.com/connect/blogs/4c/insurance/life-insurance-myths-common-misconceptions) may not be something you look forward to, your family members will be incredibly grateful to know your wishes while you’re still here to tell them.
The first step in end-of-life estate planning should be creating a will. A will is a legal document that coordinates the disbursement of your assets and can appoint guardians for your minor children. It’s recommended that anyone over the age of 18 or who owns property have a will so they can communicate their last wishes clearly.
For families with children, it’s important to discuss who will have legal custody of the children if both parents pass away. This prevents confusion during an already difficult time. If you have life insurance, you should identify the beneficiary of your plan in your will. Life insurance helps you ensure that your spouse and children will be taken care of if something were to happen to you.
## **AAA makes family financial planning simple**
Ready to jump-start your bright financial future? Book a meeting with a [AAA family financial planner](https://aaa.com/banking) to get on the road to success, no matter where you are in your journey. Through your [AAA Membership](https://aaa.com/join), you have access to savings tools like special CDs and IRAs that can help you achieve your financial goals.
**Life Insurance Disclosure**
*This information is being provided for general informational purposes only. The Auto Club Group does not assume any liability in connection with providing this information.*
Life insurance underwritten and annuities offered by AAA Life Insurance Company, Livonia, Michigan. AAA Life Insurance Company is licensed in all states except NY. CA Certificate of Authority \#07861. Products and their features may not be available in all states.
AAA Life and its agents do not provide legal, financial, or tax advice. Therefore, you may wish to consult independent professional advice prior to the purchase of any contract.
**This is a summary of product provisions and does not contain all of the benefits and exclusions. For complete terms of the insurance coverage or annuity, please contact your agent or refer to the policy/contract.**
**Annuities - LA**
Annuities are not short-term products. During the surrender charge period, withdrawals exceeding 10% will be subject to a surrender charge that may be higher than fees associated with other types of financial products and may reduce principal. Withdrawals prior to 59½ may be subject to IRS penalties, separate from the annuity’s schedule of surrender charges.
**EliteGuarantee Deferred Annuity - LAEG** Contract Form Series: ICC11-4101/DA-4101 (In OR: ICC11-4101)
**Platinum Bonus Annuity - LAPB** Contract Form Series: ICC11-4111/DA-4111 (In OR: ICC11-4111)
**Guaranteed Income Annuity - LAGI** Contract Form Series: ICC14-4120/SPIA-4120 (In OR: ICC14-4120)
The payout amount you will receive is based on your individual circumstances, the options you select at the time of application and your initial premium payment.
For California residents: If you are 65 years of age or older, pursuant to California Insurance Code §789.8(b), we are required to advise you of the following. If you plan on the sale or liquidation of any stock, bond, IRA, certificate of deposit, mutual fund, annuity, or other asset to fund the purchase of this product, please be advised that you may be subject to some or all of the following as a result of the sale or liquidation: Adverse tax consequences; early withdrawal penalties; or other costs and/or penalties. You or your agent may also wish to consult independent legal or financial advice before selling or liquidating any assets and prior to the purchase of any life or annuity products being solicited, offered for sale, or sold.
**Term Life Insurance - LT**
Premiums are guaranteed. They are level for the premium period and increase annually thereafter. Any sample premiums are examples only and may vary based on your personal health history and underwriting guidelines. The answers provided to the health questions are used to determine eligibility for coverage. Not all applicants will qualify. Product and its features may not be available in all states. **Coverage ends at age 95**.
If insured is diagnosed with a terminal illness that will cause death in 12 mos. or less, up to 50% of the total benefit can be applied for, and used as insured chooses. The remaining benefit payable at death will be reduced by the Accelerated Death Benefit paid and any accrued and unpaid interest (8% annual interest rate applies). Receipt of Accelerated Death Benefits may affect eligibility for public assistance programs and may be taxable. Please consult the appropriate social service agency and seek the advice of tax counsel before applying for these funds. The Accelerated Death Benefit is not available if the terminal illness results from an intentionally self-inflicted injury. This benefit may not be available in all states.
**Traditional Term - LTT** Policy Form Series: ICC19-1801/1801 (In OR: ICC19-1801)
**Group Direct Term** Policy Form Series: GT8200
**Individual Direct Term** Policy Form Series: ICC16-1501
**Universal Life Insurance – LULG**
Health history, underwriting guidelines and the answers provided to health questions are used to determine approval for coverage. Not all applicants will qualify. Rates may vary.
**Lifetime Universal Life Insurance - LUL** Health history, underwriting guidelines and the answers provided to health questions are used to determine approval for coverage. Not all applicants will qualify. Rates may vary.
Policy Form Series: ICC19-4701/4701 (In OR: ICC19-4701)
If insured is diagnosed with a terminal illness that will cause death in 12 mos. or less, up to 50% of the total benefit can be applied for, and used as insured chooses. The remaining benefit payable at death will be reduced by the Accelerated Death Benefit paid and any accrued and unpaid interest (7% annual interest rate applies). Receipt of Accelerated Death Benefits may affect eligibility for public assistance programs and may be taxable. Please consult the appropriate social service agency and seek the advice of tax counsel before applying for these funds. The Accelerated Death Benefit is not available if the terminal illness results from an intentionally self-inflicted injury. This benefit may not be available in all states.
**Accumulator Universal Life Insurance - LULA** Health history, underwriting guidelines and the answers provided to health questions are used to determine approval for coverage. Not all applicants will qualify. Rates may vary.
Policy Form Series: ICC19-3701/3701 (In OR: ICC19-3701)
If insured is diagnosed with a terminal illness that will cause death in 12 mos. or less, up to 50% of the total benefit can be applied for, and used as insured chooses. The remaining benefit payable at death will be reduced by the Accelerated Death Benefit paid and any accrued and unpaid interest (5% annual interest rate applies). Receipt of Accelerated Death Benefits may affect eligibility for public assistance programs and may be taxable. Please consult the appropriate social service agency and seek the advice of tax counsel before applying for these funds. The Accelerated Death Benefit is not available if the terminal illness results from an intentionally self-inflicted injury. This benefit may not be available in all states.
**Whole Life Insurance**
**Whole Life Insurance** *(for coverage amounts of \$30,000 or more) -* **LWL** Policy Form Series: ICC18-5601/5601 (In OR: ICC18-5601)
Health history, underwriting guidelines and the answers provided to health questions are used to determine approval for coverage. Not all applicants will qualify. Rates may vary.
If insured is diagnosed with a terminal illness that will cause death in 12 mos. or less, up to 50% of the total benefit can be applied for, and used as insured chooses. The remaining benefit payable at death will be reduced by the Accelerated Death Benefit paid and any accrued and unpaid interest (8% annual interest rate applies). Receipt of Accelerated Death Benefits may affect eligibility for public assistance programs and may be taxable. Please consult the appropriate social service agency and seek the advice of tax counsel before applying for these funds. The Accelerated Death Benefit is not available if the terminal illness results from an intentionally self-inflicted injury. This benefit may not be available in all states.
**Rapid Issue Whole Life Insurance** *(for coverage amounts of \$25,000 or less) -* **LRIWL** Policy Form Series ICC20-7001/7001 (In OR: ICC20-7001)
Responses to the application will be used to determine approval for coverage. Not all applicants will qualify.
This Whole Life policy is referred to as graded benefit whole life insurance. **If you suffer a non-accidental death within the first two years of coverage, your beneficiaries will get 100% of the base premiums you paid, plus 35%.** After two years, the total amount of your coverage is paid for death due to any cause.
After the first two years of coverage, if insured is diagnosed with a terminal illness that will cause death in 12 mos. or less, up to 50% of the total benefit can be applied for, and used as insured chooses. The remaining benefit payable at death will be reduced by the Accelerated Death Benefit paid and any accrued and unpaid interest (8% annual interest rate applies). Receipt of Accelerated Death Benefits may affect eligibility for public assistance programs and may be taxable. Please consult the appropriate social service agency and seek the advice of tax counsel before applying for these funds. The Accelerated Death Benefit is not available if the terminal illness results from an intentionally self-inflicted injury. This benefit may not be available in all states.
**Guaranteed Issue Whole Life Insurance - LGIWL** Policy Form Series: ICC16-6301/GWL6301 (In OR: ICC16-6301)
The maximum amount of Guaranteed Issue Whole Life insurance coverage per insured is \$25,000.00. Subject to age requirements and policy limit restrictions.
This Guaranteed Issue Whole Life policy is referred to as graded benefit whole life insurance. **If you suffer a non-accidental death within the first two years of coverage, your beneficiaries will get 100% of the level monthly premiums you paid, plus 30%.** After two years, the total amount of your coverage is paid for death due to any cause.
If you are a California resident 65 years of age or older, we are required to advise you of the following. The sale or liquidation of any stock, bond, IRA, certificate of deposit, mutual fund, annuity, or other asset to fund the purchase of this product may have tax consequences, early withdrawal penalties, or other costs or penalties as a result of the sale or liquidation. You may wish to consult independent legal or financial advice before selling or liquidating any assets and prior to the purchase of any life or annuity products being solicited, offered for sale, or sold. | |||||||||
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