Hi everyone! My apologies for taking longer than expected for my next post. Between building my house, my now almost 3-year-old, and the new addition to my family, Owen, I had not had a chance to sit down and get this together.
It’s Owen however, who inspired this post today.
Whether you already have children, or you’re expecting your first, it’s important to be financially prepared for their arrivals! At the end of the day, little ones can be expensive!
Between diapers, bottles, toys, mats, chairs, baby food, day care, school, sports, activities, I think you get the point here LOL. The list just keeps on growing. All these things can really start to add up. It’s with that in mind that I thought I would share a few tips and things I’ve done, to be sure all of these things can be paid for and done so in a way that you are still able to set aside funds for your own future.
- Start saving early! When I first heard that I was going to be a dad, besides the feeling of excitement, I also experienced some nervousness as well. The thought of having to financially support my child, now children, lit a fire for me. Luckily, I’m in a business that teaches the power of saving and compounding interest. I started to set aside money from every paycheck I got specifically for the costs that would be associated with kids. In doing this there was always funds available for the medical costs before and after they were born, along with your start-up essentials! Don’t stop saving after they are born. The costs don’t go away after birth!
- Think about the future. We all know how expensive things like day care and future schooling are. If you have the discipline to set aside smaller amounts from early on, it will add up to a lot later. For me paying for my children’s education is extremely important. This is an area, that you and your partner should discuss and come to an agreement on. In doing this as long as I have, I heard anything from we want to help, we want to pay it all, and “I did it all myself, they can too.” The point is that everyone’s feelings around this topic are different and if you have the conversation early on, you can tweak the savings plan as needed. If education is important to you, things like 529 plans, cash value life insurance, UGMA or UTMA’s will be valuable tools. If this isn’t a priority, some of the above-mentioned savings’ vehicles won’t be appropriate. Knowing where to save most efficiently is key.
- In dealing with life insurance on a regular basis during my 12 years here, I have seen crazy things happen. Anything from people who thought they were perfectly healthy getting declined for coverage, to people who continued to put off being underwritten having events transpire that made them uninsurable before we could apply. I say that because in knowing that, and understanding the importance having life insurance, I never wanted that to be an issue for my children. For me, it was very important that my children have life insurance. Each one of my son’s has $1,000,000 of permanent life insurance that accumulates cash value that can be used in their lifetimes. This money can be used for a variety of things such as college, down payment of a future house, wedding, vacation, a source to supplement retirement income, or whatever else they might want in the future. I took these out on them when the insurance company considered them 0 years old. As I’m sure we all know, every year someone gets older, it becomes more expensive to get life insurance. I have locked in, for life, the lowest possible cost of insurance you can get. On top of that, I wanted to have policies that they would never need to pay for. I did not want to put any future financial burden on them. There are policies that on a guaranteed basis, you can stop paying for after a certain period, and those are the ones I selected.
- Teach your children the importance of saving from an early age. This will lead to many advantages over yours and their lives! Helping to instill in them the discipline of savings from early age will help engrain it in them for their futures. I feel all parents aspire to leave their children’s lives better off than theirs. Of course, what you do during your life will impact that, but why not teach them that they can also better their own financial futures as well! After all, the sooner you start saving, the better off you are. While all parents are sad to see their children leave the house, they do want it to eventually happen. By teaching them the importance of financial wellbeing from an early age, maybe we can help break the ever-worsening trend of kids living home until their late 20’s early 30’s.
These were just a few tips, things I’ve done, and things to think about when you find out you’re expecting. Even with all those in mind, the most important tip I can give you has nothing to do with money, investing, what type account to start, or anything like that. My number 1 tip enjoy every minute you get with your little ones! As I’m starting to learn myself, and what other more experienced parents have passed on to me, they grow up fast so embrace the time you get with them and have fun!
I hope you have found this valuable and thought provoking. I will make sure to post again sooner than later this time around if Owen decides to let me!
Check back soon!