If you are a parent, do you have plans in place to deal with large life expenses? Raising children, paying for education, buying a house, and funding a retirement account rank as the most important things in a typical adult's life. Plus, the cost of each one is rising fast as the 2020s turn into a surprisingly inflationary period. For most working people, covering these uniquely large expenses is a matter of hoping there's enough money on hand to take care of all the related costs. It's imperative to at least have an idea of how to fund major events, and that's where financial planning comes into the picture.
Consider booking a consultation with a certified professional to discuss ways to optimize savings, investment, and retirement plans. Choose either a CPA (certified public accountant) or CFP (certified financial planner). Consultations are usually no-cost affairs and last for about 30 minutes. If you want more extensive help, pay the fee to have a full-scale plan worked up. Here are some of the key points to consider, each one of which relates to one of the big life expenses that most parents will encounter at one time or another.
Raising Young Children
Raising children is an expensive proposition these days. That's one reason so many moms and dads seek professional help with financial plans. It's especially important to have a written, detailed plan in place if you intend to have more than one child. And, in an inflationary economy, those costs are not going to go down anytime soon. A professional can help you make decisions on things like the best kinds of insurance for moms, how to diversify, and places to cut back to optimize savings.
Paying for College
Even if you make detailed plans to pay for a child's college tuition and fees, chances are you'll end up needing more funds once the big day arrives. That's because educational costs are rising fast. Plus, if you have more than one child, the potential education bill is already doubled. For many parents who have life insurance policies, it makes sense to convert them into cash via a process called a life settlement.
You can get a head start by reviewing a helpful online guide that explains exactly how the process works. Turning an unneeded policy into ready cash means you'll have more funds available to cover sons' and daughters' educational expenses. Keep in mind that you can use the proceeds for any purpose at all, because there are no restrictions on how you use the cash you get from a life settlement.
Buying a Home
The vast majority of first-time homebuyers use a mortgage loan agreement to complete the deal. That means the bank is the actual owner of the house while you live in it and make regular payments on the outstanding loan. For couples who don't have children, buying a house is usually the single biggest expense they have during their lifetimes. What does it take to pay for a new house? A substantial down payment and good credit will nearly always do the trick.
Funding a Retirement Account
The trick to funding retirement accounts and enjoying your golden years is twofold: start early in life making regular contributions and aim to shield the account's earnings through one of several tax-advantaged plans. Speak with a financial pro about your options, and get started building long-term wealth immediately, regardless of your age.