Hi friends.  We are excited to share, How Parents Can Build A Strong Financial Future For Their Children and Themselves by Sara Bailey this week.  Thank you Sara for providing this great post for us!!  We really enjoyed it and appreciate the time you took for us!!

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HOW PARENTS CAN BUILD A STRONG FINANCIAL FUTURE FOR THEIR CHILDREN AND THEMSELVES

Image via Unsplash

 

According to the USDA, it costs around $233,610 to raise a child in the United States.  With everyday expenses like schooling, clothing, healthcare, childcare, and everything else that goes into raising a family, it’s easy to see how quickly these costs can add up.  However, these estimates don’t factor in a child’s college tuition, room and board, or other expenses that may appear after the child turns 18.

To ensure that you have everything you need to provide your loved ones with the financial security they deserve, it’s important to plan, budget, and save as much as possible.  As part of a good financial plan, it’s also wise to think about things such as retirement accounts, life insurance policies, and any emergency expenses that may appear along the way — including medical or dental bills.  To learn how to get started, read on!

 

Identify Your Financial Goals

Whether you’re expecting your first child or looking to get your family’s finances in order before your children get any older, it’s important to sit down with your spouse to identify your key financial goals.  Several examples of financial goals include the following:

• Short-term goals, such as buying a home or new vehicle
• Long-term goals, including saving for college tuition and retirement
• Setting money aside for building an emergency fund
• Purchasing life and burial insurance

Once you’ve identified your key goals, meet with a financial planner or advisor to develop a savings and investment plan for your family’s future.  Your financial planner can help you to develop a personalized savings plan and assist you with budgeting for the future.

Build a Financially Secure Future

As a parent, you need to find ways to protect and provide for your child now and well into the future — even in the event that you can’t be around to care for your family.  To do so, it’s important to create an estate plan as early as possible, as this will give your child the financial support he or she needs in the event of your death.

When creating your estate plan, the Motley Fool recommends purchasing a term life insurance policy, as this type of insurance protects surviving dependents in the event of your premature death. Term life insurance premiums are typically the cheapest, but using an online calculator can help you estimate your rates as you shop around for a policy.  If one of your children has special needs, however, a whole life insurance policy may be a better option for you.

Moreover, things such as crafting a will, naming a legal guardian for your children, and updating the beneficiaries on each of your assets are other crucial steps you should take when creating your estate plan.  If you’re new to estate planning, it may be wise to hire an estate planning lawyer to assist you throughout the process.

 

Invest in Your Child’s Future

After you’ve built an emergency fund, started saving for retirement, and purchased life insurance, you can begin to invest in your child’s future.  Some of the best ways to save for your child’s future may include opening an Education Savings Account (ESA), Roth IRA, Money Market Account, and other investment accounts known as the Uniform Transfers to Minors Act (UTMA) or Uniform Gift to Minors Act (UGMA).

Before you begin to save for your child’s future, it’s important to ensure that your own finances are in order. If you need to put a hold on your own savings goals — especially your retirement
— it’s not an ideal time to start investing in your child’s future.

As a parent, your heart may tell you to put your child’s financial future ahead of your own.  However, putting your finances first will reduce the likelihood that your child will need to support you financially as you age.  Plus, keeping these tips in mind as you raise a family will help you to pave the way for a stronger financial future for you and your children.

 

Looking for other great articles by Sara?  Take a look at these:

When a Senior’s Spouse Dies, Finances Can Get Overwhelming

How To Live Well Without Sacrificing Your Savings

 

Author Bio:

Sara Bailey

Sara Bailey hopes that by sharing her journey of grief she can provide insight and hope for others who experience loss.  She created TheWidow.net as a way to share her unexpected journey of losing her husband and learning to be the best parent (and person) she can be while nurturing her grief.

 

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