Image via Pexels
Financial Planning for Parents 101
Once you decide it is time to be a parent, financial planning is a smart idea. You can’t control what life throws your way, but you can control your resources. Use these helpful tips to get into good financial shape as you embark upon parenthood.
Evaluate Your Assets
Before you can plan ahead, you have to know where you are. Go over your assets including cash, accounts receivable, retirement funds, property, stocks, bonds, patents, and copyrights. If this all seems overwhelming to you, consider hiring a financial planner that can help you craft a personal financial statement you can use as a base for your decisions going forward.
Start a Budget
The word “budget” certainly doesn’t elicit ideas of fun times, but if you want to start saving for your child’s future, it is a life essential. Set aside how much money you have to spend on the fixed costs of life essentials such as rent (or your mortgage), insurance and taxes. Most of us have little or no control over how much we have to pay on those things. From there, you can find ways to cut costs on the rest of the things you spend money on. Take the money you save and put it aside in a savings account you can access for your child should you need to.
When you become a parent, the days of shrugging off minute expenses such as ATM fees are behind you. Cutting down on costs in all areas of your life can add up in the long run. And each one of those pennies you pinch can be stowed away for your child’s future.
Think about it. Say you cut $5 off your daily expenses somehow — let’s say brown bagging your lunch instead of buying something from a restaurant. If you started that action on the day your child is born, setting aside the dollars you aren’t spending in a savings account, you would have a large chunk of their college tuition paid off. Just $5 a day for 365 days, over 17 years adds up to $31,025, and that’s before any interest you’ve earned.
Other ways you can cut costs and save money for your child’s future:
Establish Legal and Financial Protections
Things such as a will and a good life insurance plan will protect your child in case the unthinkable happens and you can’t be there to do it yourself. Make an appointment with an attorney and make updates to your will with every major life change such as marriage, divorce or a new child.
When it comes to purchasing life insurance, there are three basic varieties: term, universal and whole life. While term life insurance is more affordable, it eventually expires and no benefits are paid out after that time. Whole life insurance lasts — you guessed it — the entire lifetime of the policyholder. Universal combines aspects of both whole life and term life insurance. When choosing your life insurance plan, make sure you understand the different cash values and premiums available. With some plans, you can sell your insurance at retirement as a way to free up cash, so it basically acts as a savings plan. If you’re looking into term life insurance and want an idea of cost, try using this rate calculator to see what you could potentially pay.
The costs of raising a kid shouldn’t keep you from having one, but a little financial planning is a smart idea. Evaluate your assets and establish a budget that allows you to put dollars away for your child’s future and emergency costs. The money you save doing things such as bringing your lunch or turning off the lights add up. Beyond a working budget, protect your child with a will and life insurance that make sure they are financially set in a worst-case scenario.
Thewidow.net | email@example.com
As senior couples grow into their golden years, one event they will likely have to deal with is the death of a spouse. When this happens, the grieving senior will need to have a support system they can count on. Here are some of the ways you can be there for your loved one when they need financial guidance as well as grief support.
Be Patient with Their Grief
Just as it is with any kind of loss, you’ll need to allow your loved one to go through the stages of grief. According to Very Well Mind, they’ll go through denial first, followed closely by anger. It might not be easy to deal with how they express their anger, but bear in mind that it’s a part of how they’re processing their emotions. They may not be approachable at this time, but they still need your support, especially when it comes to finding important financial documents. These include account statements, insurance policies, and property titles. If the spouse had any business holdings or contracts, these documents will need to be located as well.
Help Them Make Decisions
While your loved one is dealing with the death of their spouse, it can feel overwhelming to make even minor decisions. You can take the pressure off by guiding them. One essential decision they may have difficulty with is making their end-of-life arrangements. This can be an easy way to spare their surviving relatives the financial burden of future funeral costs. While having that talk, be sure to talk about prepaid funeral plans that let them pay for funeral costs before their passing. They can choose from life insurance, burial insurance, or saving in a joint account.
Help Them with Triggers
Even as your loved one is trying to cope with their loss, you have to watch out for grief triggers that can make their efforts harder. According to My Grief Assist, a grief trigger is something that rekindles memories that can lead to feelings of sadness and regret. They can lead your loved one down a path of loneliness and even depression. After their spouse’s passing, contacting the long list of people who need to know can be one of those emotional triggers. You can help by informing the spouse’s employers, credit bureaus, and health and life insurance companies, as well as banks or credit unions. Additionally, it will also be important to note that your loved one will have to file their taxes differently moving forward.
Help Them Cope with Change
After such a major change in their lives, it shouldn’t be surprising that your loved one isn’t open to modifying anything else. While you may be making plans to put away their deceased spouse’s belongings, they may resist at first. The best thing you can do is be patient with them and take things slowly. If you want to talk to them about downsizing to cut down on housing costs, then you may want to enlist the help of friends and family to help drive the point home in a kind and understanding manner. It might be good to encourage them to find a financial advisor who can help them reassess their savings and retirement needs.
Losing a spouse may be one of the hardest things your senior loved one has had to deal with. Just know that they will only be able to get through it with the help of those who love them and mean them well. You should do the best you can to support them and encourage others in as well so you’re not doing it all by yourself.
Photo via Pixabay
Life can change fast, so ask yourself, “are the things that matter most to me protected?” Know how much you need and take action. Let’s review your life insurance.
The average cost of a private 4-year college: $194,040. So if college is in your children’s future, life insurance should be in your financial plan today. Be sure your loved ones are protected.
DID YOU KNOW? The average cost to raise one child to age 17 is $233,610. Think about that. If you have two kids, that’s half-a-million bucks just to get them through high school! That’s a pretty good reason to think about life insurance.