Starting a family is one of the most joyous occasions life can throw on you. As easy as raising a family may seem, it comes with great responsibility and a life-long commitment to providing love and care for those you choose to spend your life with. In 2013, as many as 85% of American consumers agreed that most people are in need of life insurance yet only 65% actually had life insurance. This is just one example of how many individuals fail to realize the importance of financially providing for their own futures and that of their families.
The one thing every parent wished they had more of, is time. It is very difficult to think about long-term needs and goals when you are faced with a seemingly endless list of daily duties ranging from making school lunches to sorting washing and doing the school run. This day-to-day living has a significant impact on your finances as well. If you and your partner are constantly surprised by how quickly you find yourselves strapped for cash each month, then it's time for you to hone in on your day-to-day expenses, get your outgoings under control and start focusing on the future.
In this day and age, life insurance is an absolute must. It is of vital importance to make sure that the policies are sufficient to provide care for the family in the unfortunate event of the death of a parent. Term life insurance is cheap so it should not become a financial burden if you fully insure yourself. The main idea behind term insurance is to provide coverage during a family’s most vulnerable years which is generally before the children have graduated from college.
Disability insurance is one of the most underrated financial tools a family can employ. When you are in your mid-thirties to forties you are seven times more likely to have your income disrupted by a disability than by death. While some states offer residents disability payments, many employers also provide such coverage. It is up to every individual to find out what disability cover they qualify for and to make sure it is enough. It is important to avoid policies that promise to pay you money back at a certain age as your premium will be much higher. Aim to pay as little as possible through a reputable company.
Write a will
It is absolutely essential to write a will and appoint guardians of your children because if you don’t appoint one, a court will be forced to. It is suggested to name an individual/s rather than a couple as they might divorce. It is quick and easy to draw up a will. You can use a free, downloadable template or hire an attorney to assist you for approximately $300.
Every parent only wants what’s best for their children, which is why setting up a college fund is so important. Many parents in the USA make use of a 529 plan which allows you to invest and withdraw money tax-free as long as it is used for college expenses. If your child doesn’t end up going to college you can use the savings for any other family member. Education may be pricey but you cannot put a price on your child’s education.
The sooner you start contributing towards a college fund the better prepared you will be when your child embarks on his/her tertiary education journey.
Focusing on short-term delights and ignoring financial issues puts a family’s security at risk. While starting a financial plan may not be easy it is well worth the effort in the end when you can rest assured that your family’s futures are secured. Don’t allow money matters to overwhelm you: think each issue through thoroughly and, together with your partner, make decisions that will benefit you and your loved ones most.