There's no time like the present to take something unpleasant off that to-do list. We're talking about getting your financial house in order. It was one thing to blow off retirement planning and life insurance back in the pre-kids days, but now? It's time to say hello to your inner responsible adult and take some action.
Not sure where to start? The following tips are generally recommended by financial planners as good basic steps for parents (or anyone, really) when getting their finances under control.
1. Emergency Fund
Experts recommend you have 3-6 months' worth of living expenses stashed away in an emergency fund. Smart thinking since the kids still need to eat even if you lose your job. Start putting away some cash each month until you're prepped for those unforeseen financial pitfalls.
2. Estate Planning
Ok, this def sounds like something our parents would be doing but tbh it's something you should be doing. Estate planning means you've got a will, you've assigned a guardian for your kids, and you've set up power of attorney and health care directives. If anything goes awry, you can feel comfortable knowing your wishes will be carried out.
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3. Life Insurance
Depending on your specific situation, might be time to think about life insurance. This won't be the most fun activity, but researching your options and learning life insurance terminology will be a surefire cure for that insomnia. So there's a plus.
4. Retirement Savings
Yes, we know that retirement seems like a lifetime away, but starting early gives you the power of time to compound that money. Talk to a financial advisor, do some research, and figure out what options are available for you – IRA, 401k, rich uncle...
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5. College Planning
Right now you're not sure they'll ever be able to tie their shoes let alone get into college. But hey, you'll probably be surprised, and better to overprepare amirite? The sooner the better for starting those college savings plans like 529's so chat it up with friends, family, or better yet a professional and figure out how to make sure you can be crying your eyes out at college move-in day.
