Parenthood is all about making the best choices for yourself and your family. Sometimes, however, it can feel like important opportunities have gotten away from you. It’s easy to convince yourself that if you don’t start parenthood with your finances in hand, that getting them on track is impossible, and this can create quite a bit of stress.
Don’t make the mistake of thinking it’s too late to take control of your money. Whether you’re a soon-to-be parent or are teaching your child to drive, you can still make powerful financial choices that will protect your family in the long run. Here’s a look at some of the best things you can do for your family now:
Planning for End-Of-Life
There are too many uncertainties in life to leave your family’s circumstances following your death up to chance. If you don’t already have one, look into taking out a life insurance policy. This kind of insurance will help to cover funeral costs, medical bills, and lost income, sparing your children from heavy financial burdens and possibly providing for their future.
Thanks to the Internet, you have easy access to information about getting insurance. It’s never been easier to compare rates and make sure you get the best option. You can use online calculators to get a sense of how much coverage you need and what kind of rates you can expect. Remember – the younger and healthier you are when you take a policy out, the lower your rates will be. Since these rates are usually locked in for several decades, the best time to get life insurance is always now. Bear in mind that most insurance providers will require a blood test and possibly an exam to help ascertain your overall health, which helps them determine your premiums.
Keeping Close Track of Finances
One of the most important things you can do for your finances is to build a budget. Track your spending for a few weeks, and use your current patterns as a starting point. If you find that you currently spend too much to be able to confidently save for the future, figure out ways you can cut costs. Some spending areas, such as monthly bills, can only be reduced so far. Others, like entertainment spending, have much more wiggle room.
Finding ways to set limits, cut costs, and stick to a budget during your child’s early years will set your family up for long-term success. Not only will you have control over your finances, you’ll be able to set a great example for your child’s whole life. You can even make a family activity of building and planning a budget: Have your child track and plan how to use their allowance so that the act becomes second nature.
Looking Toward Buying a Home and College
After you’ve built up your savings, you may want to consider buying a home for your family. While a home can be a profitable long-term investment, you’ll need to be careful to buy one within your means. You’ll need to save up for a down payment and shop for a mortgage with monthly payments you can afford. If you’re a first-time home buyer, an FHA loan may be the best option. PennyMac FHA loans offer lower down payment options and have more flexible income and credit requirements.
It’s never too late to start considering what kind of savings you want to set aside to ensure their future. Even if you only have a few years to set money aside, an academic savings plan will still help them to achieve their dreams (affordably). There are plenty of ways you can save for your child’s academic future, but the most common kind of college savings is a 529 plan.
These plans can be used toward a four-year degree, but they can also go toward other educational costs, such as trade school, books, or even off-campus housing. Each state offers its own version of this plan, but you don’t have to choose the version from the state you reside in. Take a look at the options and figure out a plan that’s best for you and your family.
You may not have your finances together perfectly, but there’s always time to do better. Remember: The earlier you start any kind of savings, the more you’ll have set away. Planning ahead is the best thing you can do for your family’s long-term security and happiness.
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