Guest writer for The Hanley Home Tea Blog – Jackie Waters
As a parent, from the day your baby comes bursting into the world, you are going to want what’s best for them. As the saying goes, parenthood does not come with a manual or set of instructions. However, day in and day out, you try your best, even though your best may vary from day to day. There’s no way to predict the future, but there are certain steps you want to have in place to ensure that your child’s future is secure. Raising a child can indeed be expensive, but the rewards are far greater than the monetary costs. Here are a few contingencies to plan for in the future for you and your child.
Obtain a life insurance policy
Having a life insurance policy in effect for you and your spouse will guarantee that your child is taken care of, in the event of your demise (an estate plan wouldn’t hurt either). Having a policy will provide the extra protection and cushion your family would need, should a tragedy occur. Becoming a parent is one of life’s major milestones and it is imperative that you prepare you and your family for any seen or unforeseen circumstances. There are several life insurance coverages available, each varying in different perks as well as drawbacks.
There is term life insurance, which provides coverage for a certain period of time. If the insured should live past the term of the policy, no benefits will be made available. However if the insured should die during the term of the policy, all benefits will go to the beneficiary, be it your spouse, child or a split between the two.
Whole life insurance lasts for the entire life of the insured. It also offers the ability to accumulate cash value on a tax-deferred basis. As long as you, the insured, continues payment on the premium, the policy will remain in force. Making sure you chose the right policy that w\ill properly benefit your family is a vital task. If you are not sure which is best, it is advised to meet with an insurance representative to gain clarity.
Save for a home
The home you are currently living in may suit your family’s needs just fine, but you never know what circumstances could lead you to purchasing a new home. Perhaps you got a new job or your family has outgrown your current humble abode. According to studies, Americans feel that building equity, wanting a stable and safe environment, and having the freedom to choose their neighborhood are the top reasons to make the financial decision to buy a home. Regardless of what circumstances have led you to make a real estate purchase, it will take some planning. Determine how much you need to save for a down payment and set a realistic timeframe in which to do it. Allocate a percentage of your income to be placed in a savings account dedicated to buying a home, and watch as you gradually build toward your goal.
Start a college savings plan
Having a child obtain a degree is a dream most parents have, however the current amount of student loan debt is alarming. Many students are graduating from major universities and entering the real world with an unsurmountable amount of debt, with no surefire plan in motion to pay it off. Interest rates are high, leaving most college grads with a financial burden they may never be able to escape. Take action to ensure that this will not be your child’s future. Having a college savings plan in place eliminates debt for your child and grants you the peace of mind that your child will be given the opportunity to receive a great education, stress-free.
Starting early on your child’s college plan will also ensure that you won’t have to deal with the burden of paying for their education, should they not receive enough funding for their school of choice. Similar to life insurance, there are several college savings vehicles available, with the most commonly heard of being the 529 Plan. A 529 Plan is an education savings plan operated by a state or educational institution designed to help families set aside funds for future college costs. Consider your options and start saving money for your child’s future expenses immediately.
Few things in life compare to the joy of starting a family. Becoming a parent will be one of the most challenging, yet fulfilling experiences you will have in your lifetime. Ensuring the security of your child’s future is one of the best gifts you can give them —along with lots of love, affirmation and guidance. Set your child up for success in life and your job as a parent will be perceived as well done.
Author: Jackie Waters