5 Basic Financial Decisions All Parents Must Make
There’s is a lot to consider when it comes to financial planning for parents, but these five basic financial decisions will go a long way to financial success.
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Choose a Guardian for Your Kids
Speaking of things that aren’t fun to think about, who would be the Guardian for your kids if something were to happen to you? Who would make sure the bills get paid? Who would make health care decisions for you if you become incapacitated? Whatever your answers are, you need to write it down and create a Will and perhaps Trusts. More than anything, you want to be sure your kids are safe, your assets go to who you want them to, and that you don’t leave a huge mess behind. That can only happen if you create the right legal documents.
Consider a College Savings Plan
What about college, you might ask. You probably don’t know this yet, but [looks around to make sure no one is listening] college is expensive! Like anything else you save for, the sooner you start, the better your chances for success. There are many places to save for college—including a 529 college savings plan. I would say that no one vehicle should be the only place you save money for college, but if college is something you want for your children, a specific plan to save for college for it is essential.
Build an Emergency Fund
Finally, and perhaps most importantly, you need to find a way to have sums of money accessible at all times, like an emergency fund. And if you have short-term debt (credit cards, auto or student loans, etc.), you need to find a way to get out of it, while still building up a liquid source of money. Debt is not just a number on a page; it is emotionally charged, so there is a temptation to try to put all of your extra money toward eliminating it. But you need to build a liquid source of money (an emergency fund) at the same time. If you don’t, then once you are out of debt and something goes wrong (such as losing a job, fixing your car, or needing expensive medical care), you’ll just fall right back into debt again. Having that available source of money isn’t just about protecting you against bad things, you need it so you can take advantage of unique opportunities along the way.
There is a lot that goes into being successful financially—especially once kids are added to the mix. But if you start with these five basic financial decisions, you’ll dramatically increase your odds of success, which means you increase the odds that your kids will be successful. And what’s more important than that?
Bobby Angel is a Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). OSJ: 120 Broadway, 37th Floor New York, NY 10271. phone: 212.701.7900. Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is a wholly owned subsidiary of Guardian. Strategies for Wealth is not an affiliate or subsidiary of PAS or Guardian. CA Insurance License #0G64811. Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation. The Guardian Network® is a network of preferred providers authorized to offer products of The Guardian Life Insurance Company of America (Guardian), New York, NY and its subsidiaries. Strategies for Wealth is an independent agency and not an affiliate or subsidiary of Guardian.2020-109480 Exp. 9/22