Being a parent comes with a ton of responsibility and some uncomfortable realities…
Open A College Fund
Student debt can take decades to clear leaving both parents and their children with a weighty financial burden. According to www.savingforcollege.com the projected cost of a four-year degree for a public, in-state university will be close to $100,000 by 2033. A private university will be closer to $325,000.
“Despite how much more attention our country is paying to the student loan debt crisis, college is not getting cheaper,” says Karen Hurt, financial advisor at Hurt & Associates. “Therefore, the earlier you start saving for college, the less of a financial burden your child will have when they graduate.
Parents should always prioritize their own retirement savings over college savings, but pulling together checks and cash their kids get for birthdays and holidays can always go into a college savings plan rather than being wasted on a toy that will break in two days.
“Options to consider include 529 college savings plans, which grow tax-deferred, and, if used for qualified education costs, are tax-free in distributions. Most states sponsor specific 529 plans and offer deductions on state income tax to residents. “Educational IRAs are also tax-free if used for qualified education expenses. It’s worth seeking out a good financial advisor to work out the best option for you.”
Make A Will
Imagining a world where your little one doesn’t have you around is grim to say the least. However, it is vitally important that you have a plan in place for the unthinkable. In the event of your death who would look after your child? Who would be the guardian of your choice? When it comes to a trust fund, at what age would you be comfortable with your child inheriting it? This stuff needs to be in a legal document.
A good lawyer can talk you through all the options for setting up trusts and powers of attorney. If you can’t afford a lawyer then perhaps your employers have options for a legal services plan as part of your work benefits? You could also consider an online service like Nolo to craft an online will and state your power of attorney wishes.
Get Life Insurance
Who earns the bulk of the income in your family? How would you get by without it? According to a study by non-profit organization Life Happens, four in 10 households without any life insurance would have immediate trouble paying living expenses if their primary wage earner died.
Options for buying life insurance include getting a quote from an agent, via your workplace or even online. If you feel overwhelmed try visiting www.lifehappens.org for a breakdown of the different ways to find coverage and how they might be best suited to your needs.
Pack A Go-Bag
Whenever there is footage of children hunkering down in temporary shelters after a natural disaster it really hits home how important it is to be prepared in a disaster scenario. Packing a bag with essential items to help your family in a crisis situation should be on every parent’s to-do list.
“Our bag is simple,” says mom blogger Lucy Pask of WindyCityBrits.com. “A change of clothes for everyone, important documents, a radio, phone chargers, mac ‘n’ cheese boxes, water, meds, and snacks. It gives me the peace of mind that if we ever leave the house in a hurry we could get through 48 hours until we found our feet.” You’ll find more tips on how to prepare your family for a natural disaster here.
Charlotte Ward is a British writer, tree hugger and toddler entertainer. She is based in California where she can be found enjoying the outdoor life with her husband, son and hyperactive dog-child.