Your Family’s Future: Financial Planning Advice for Parents by Sara Bailey
Parents with young children have a lot to contend with. Between keeping the house clean, getting kids to bed on time, and making sure they grow up happy and healthy, there’s little time for anything else, and you can certainly be forgiven for overlooking long-term financial arrangements, at least for now. But there’s too much at stake to leave anything to chance, even before your little ones haven’t even started school.
It’s important to do as much as possible to provide for their long-term security as soon as possible, so consider the following tips as you think through how to make your financial arrangements. Don’t underestimate the role that having control of your financial situation plays in your happiness and overall emotional well-being. Your children will reap the benefits of a happier you nearly as much as you will.
As a new parent, the last thing on your mind is your death and how it might affect the children. It’s not a pleasant subject, which is why many young couples avoid it altogether. If you’re a parent, one of the most important dispositions you can make in a will is to name a guardian, someone who will care for your young ones should something happen to you and your spouse.
It’s a weighty decision, because it’s how you’ll make sure your kids would be taken care of by someone who shares your values and will be conscientious about keeping your memory alive with your children. Nearly as important is naming an executor, a trusted individual who will make certain that your wishes are carried out, that beneficiaries get what’s coming to them, and debts and final expenses are paid.
Planning for your funeral in advance is one of the most considerate things you can do for the loved ones you leave behind. Funerals are expensive business, costing on average anywhere from $7,000 to $9,000 these days. Making all those unpleasant decisions, like whether you’ll be buried or cremated, how your remains will be disposed, and where the funeral will take place, is important, because they bear heavily on the costs involved. You can save your survivors a great deal of money by making careful, well-considered decisions about your funeral in advance.
Life insurance is another important financial consideration for young parents. If you and your spouse haven’t taken advantage of insurance offered through your employers (young parents often haven’t gotten around to it yet), take the time to find out how much insurance coverage you could get, and compare that to your loved one’s anticipated needs. Make a careful and detailed assessment of your finances so you get enough coverage – bear in mind that $500,000 worth of insurance coverage will cover a few years of living expenses.
The annual cost of college tuition stands between $5,000 and $50,000 a year; in a few years, it could be approaching half a million dollars. That’s a massive chunk of money for anyone, which is why saving for your child’s college costs as soon as possible is so desperately important. The fallout of college students having had to finance their own college education is by now well-known; an entire generation of young Americans will carry that oppressive financial burden well into their older years.
Take steps to ensure that your children don’t fall into the college loan trap by setting up a college savings plan A 529 savings plan is one of the more popular options these days, offering tax breaks and considerable flexibility. Remember, the sooner you begin saving, the better for your children’s’ futures.
One of the best things you can do for your little ones is to settle your financial affairs and make plans for the future as soon as possible. Many people have waited too long or avoided the whole thing altogether, to the great disadvantage of their survivors. It just takes a little careful planning, and the benefits will last a lifetime and beyond.
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