Young Parents Checklist

Young Parents Checklist

                                                                           Recent trip to Chicago 

                                                                           Recent trip to Chicago 

As young parents, there is a lot on our plates. With new challenges popping up weekly with our children, in our marriages and at work our finances may fall down the list of priorities. However, if we take the time to create a financial plan now it will have a tremendous positive impact on our family in the near and long term. Here is a quick checklist to prepare for the potential opportunities and challenges ahead.

Update Beneficiary Info: Add or update information for your spouse and children to your IRA, 401(k), Life Insurance, Annuities, and “in trust for” accounts. Instructions in a Will or Trust do not override beneficiary accounts.

Apply for or Increase Life Insurance Policies: Meant to provide short and long-term financial security to your family. Life insurance can help pay bills while your spouse deals with the situation and then fund future expenses such as college and a mortgage. There are two common methods to determine how much insurance you may need: Lump Sum or Income Replacement. We will help you determine the amount of insurance you need and evaluate different insurance companies. We do not sell insurance or receive commissions. 

Contribute to Retirement Accounts: Your 70s will come up faster than you know! Do you know you can contribute to an IRA and a 401(k) in the same year? If you start early you will take advantage of compounding earnings and may be able to put away less each year over your working career. It is smart to plan for less than 100% funding of Social Security when you reach the qualifying age. Contribute to your retirement accounts to avoid being a burden on your kids later in life and to ensure you can live comfortably in retirement. Put contributions at the top of your budget!

Start a College Savings Plan: On average, college costs double every 9 years! You can use different types of accounts to pay for college but some offer additional tax benefits. 529s are a tax-free account and they can help you stay ahead of those rising costs by investing in stock and bond mutual funds. Another plus is the beneficiary can be changed giving you the flexibility to pay for multiple children’s college expenses. In some cases it may make sense to use money from a retirement account to fund college costs in order to still qualify for student loans.

Will: A Last Will & Testament provides a “Guardianship Plan”, trustees for testamentary trusts, and give specifics for who receives your assets. A Will dictates your wishes instead of the courts and can help limit family disputes.

Trusts: Testamentary Trusts dictate when, where and how your children receive money or assets that you own. This can help your children avoid the pitfalls of sudden wealth. Trust assets are neither subject to probate nor disclosure to the public.

Health Care Directive: Names someone as your agent to make medical decisions for you instead of the courts appointing someone. Only becomes effective if you are unable to make medical decisions for yourself. 

Durable Power of Attorney: Names someone as your agent or attorney in fact to make business or financial decisions for you. Powers given to the agent can be very broad or very limited depending on what you specify.

As a young parent myself and Certified Financial Planner, I am equipped to provide relevant advice and educate young parents so they can make wise financial decisions for their family's future.

Calm Thoughts: Stick With The Plan

Calm Thoughts: Stick With The Plan

Spread the Word: Consumer Reports Recommends Advisers Who are CFPs and Fee-Only

Spread the Word: Consumer Reports Recommends Advisers Who are CFPs and Fee-Only