Smart Money Moves for Young parents
As soon as most parents bring their first new baby home fromthe hospital, the realization of the newfound responsibility that a child brings kicks in.
Here is some advice to help you along your path to finacial security:
Create a will and contingent trust. This is one of the most important first steps. Choosing a guardian for your children helps make sure they are raised by someone who you think will share the same values. A contingent trust helps ensure that the money your child receives from all of your hard work and planning is distributed according to your wishes instead of giving them complete control over everything the minute they turn 18.
Update beneficiary documents. Make sure you double check all of your retirement plans and insurance policies so something doesn’t fall through the cracks. Many accounts with beneficiary designations never pass through your will, so it is important that these are also updated.
Purchase life insurance. Consult with an Insurance profefssional to determine what best fits your needs and your budget. When deciding on life insurance, always consider how things can change in the future and never purchase more than you know you will be able to afford into the future.
Buy disability insurance. When you are young, the cost of coverage is less and your health may be at it's best. Your future earning potential is your biggest asset. Get as much disability insurance coverage as you can to comfortably cover your income if you get sick or injured and can’t work. A disability lasting longer than three months is much more common than you think.
Consider a small whole life insurance policy on your child. This accumulates tax-free savings and has a guaranteed purchase option, which gives your child the option to purchase additional insurance when she is an adult, regardless of her health at that time.
These ideas are to help families preserve their wealth through generations. If responsibly acted on, this advice will help you accomplish your goals.