News flash: becoming a mom means you’ll suddenly become more concerned about the future than ever before. That’s because it’s not just your future you’re worried about—for the next several decades, your child’s well-being will largely depend on how well you map out a financial plan. Sound financial plans rely on managing income, spending, and debt and will likely include investment tools including life insurance, college savings plans, and retirement accounts.
While investing can be complicated, most financial planners recommend you start by taking a simple step: write a bare-bones budget that takes into account your guaranteed income and only unavoidable expenses like rent, utilities, insurance premiums, diapers, and the like. Try living without any frills for a month—it may not be as hard as you think. You can’t invest money you haven’t saved.
Once you get in the habit of saving money, the advent of motherhood is the ideal time to look into life insurance. While it may feel uncomfortable—nobody likes imagining their own death!—life insurance isn’t just a hedge against the unthinkable, it’s a proven method of saving money. Take time to understand the differences between term and whole life insurance and even more specifically, research the best life insurance for moms. Term life insurance can guarantee kids get a college education even in the event of a parent’s death.
Similarly, it is never too soon to start saving for retirement. You’ll enjoy safety in the future, and tax advantages right now. Many employers offer to match the funds you invest in their sponsored 401K plans, which can as much as double the amount of money you save yourself.
Watch your credit score like you watch your weight. (No, you don’t have to check it daily. Once monthly is fine.) Sign up for a free credit monitoring service. A high score can save you money down the road on large purchases like homes and autos. Meet credit card, auto loan, and mortgage due dates scrupulously. Having cash flow problems this month? Let your utility bills slide rather than your credit cards. Late utility payments typically don’t affect your credit score.
If you’ve already accumulated some debt, you’re not alone. The average debt held by people aged 25-34 is $42,000. The best strategies for reducing debt include paying more than the minimum payment on cards as often as you can. Pay off cards in descending order of interest rates: start with your highest rate card and work your way down. Take advantage of special balance transfer offers. And if you have a mortgage, try to make one extra payment every year. You’ll pay less over the life of your mortgage.
Invest in your child’s education early by opening a qualified 529 college savings plan. While 529 contributions are not tax-deductible, any income you earn on your contributions is not subject to federal tax. Another option is UNest, which offers a tax-advantaged account for the benefit of minors that allows you to save for more than just college. In addition, unlike a traditional 529 account, with UNest there are no penalties on early withdrawals if you use funds for the benefit of the child.
Finally, one of the greatest gifts you can give your kids is teaching them about money. Start with a piggy bank; then graduate to a savings account. Many of us were raised with the idea that talking about money is taboo. But being an active financial role model yourself will give them an invaluable tool for adulthood.
If you’re looking for a personalized life insurance policy, check out EveryDay Life:
- Assess your life insurance needs via a few general, quick and easy questions.
- Generate a life insurance recommendation, tailored uniquely to you
- Smart and affordable coverage plans offer clear quotes with the other information you need to decide
Everyday Life offers online personalized life insurance plans that help customers get the right amount of coverage for the right price. Unlike traditional life insurance providers, Everyday Life combines customers’ applications with public data sources to create a more complete insurance profile. Using this, the company offers plans that are tailored to the individual. The system is a smarter, more innovative way to offer life insurance policies. Better yet, Everyday Life strives to be transparent and easy to understand. The company has a “no games” guarantee.
Additionally, for most people, as life changes, their insurance needs change too. Someone with small children who is the primary breadwinner needs more coverage than someone with plenty of savings and adult children. Everyday Life plans adjust automatically as customers’ lives change. For example, if a customer’s children grow up and are able to support themselves, the customer’s coverage and the premium would decrease accordingly. Everyday Life makes keeping coverage up-to-date easier by automatically adjusting the policy. It is life insurance for the information age.
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