Investment is crucial for individuals as well as families. As you start a family, your responsibilities come to the forefront. To tackle these responsibilities, you must start investing at the earliest.

There will be plenty of milestones in your family life, such as buying the house of your dreams, hospital expenses, the birth of a child, and college expenses. If you have safe and sound investments in place, life will be easier financially.

Sometimes, young families get so absorbed in their careers and in enjoying life, they tend to ignore some investment aspects that will secure their future as the family expands.

Long-term goals
While planning for investment, focus on your long-term goals. Social security checks are inadequate to cover for day-to-day expenses. Long-term funds and bonds are good. The money is locked for a longer tenure, say a 10-year period, at a specified interest rate.

Pay off debts
If you are planning to retire comfortably, the best way to start investing is to start on a clean state. By paying off your debts, you will pave the way for more savings. Start by paying off debts like credit card, student loans, or car loans, which carry high-interest rates.

Save for retirement
Even though your retirement is decades away, there is nothing better than a good old 401 (k) plan and Roth IRA plan. Try to match your employer’s contribution to make it 100%. Couples have the advantages of employer-sponsored plans and claiming retirement savings tax breaks. Take advantage of such plans to maximize your contributions. Couples need to save at least 10%-15% of their pre-tax income.

Start with ETFs
Savings start with ETFs (Exchange-Traded Funds) and mutual funds. They are a great way to start building a portfolio. Under ETFs such as the Vanguard 500 index fund, you are investing your dollars in a basket of 500 stocks. Try to set aside a portion of your paycheck to invest in mutual funds every month.

State 529 plan
Find whether your state is a part of the State 529 plan, a saving plan tailored to help you save for your children’s college tuition. The legal term used to describe this plan is qualified tuition plans. It is state-sponsored and authorized under section 529 of the IRA. Take advantage of these funds, which are exempt from federal taxes.

Savings
Make saving a habit. Allocate 20% of your savings to cover for any emergency or unplanned expenses. This will give you liquidity. Moreover, keep some savings at your disposal, for example, in your savings account. Choose a high-yield savings account that offers liquidity for a rainy day.

Insurance
Though young families do not realize this earlier, the security of insurance must not be underestimated. Insurance is a type of family umbrella that can provide cover to the entire family in a very inexpensive and secured manner. Personal insurance and health insurance are the best investments one can make for their family. The government-sponsored Obama Care Act is an affordable insurance program that offers tax benefits as well.

Family investment planning is all about setting priorities right when the time is on your side.