When
you decide to start a family, a lot of
responsibility accompanies it. You now have people whose wellbeing you’re
responsible for, and in the midst of all of that, looking after yourself is
equally important. One of the best ways to look
after your family is by making financial decisions that will give them a
brighter future. Although every decision you make probably won’t be right, you
can increase your chances of making the right ones by acquiring the correct
knowledge. There are some financial decisions that you can make that should
ensure everyone is comfortable in the long term.
Creating a College Fund
If you have young kids, you will want to see them do better
than you have in life. As you know, education can create so many more opportunities, so securing a college fund for them may be a
wise idea. Instead of overwhelming yourself with the cost of fees and putting saving
off, take it a day at a time. If you were to save
as little as $100 a month, that would
give you $1,200 a year which could be much more over the next ten years. Here
are a few ways to save for their college fund below.
Savings
account:
Opening a savings account is one of the most ideal and safest ways to save for
your kids’ college fund. It is an easy
way of saving but be careful because a disadvantage is that it could reduce the
amount of financial aid they get.
529 College
Plans: You
could also explore the option of 529 college plans if you like the idea of
investing after-tax money into stock and bond funds. You could then withdraw
the money tax-free for qualified education expenses.
Prepaid
Tuition Plans: A third option to explore for your kids’ college fund is a prepaid
tuition plan. This is only ideal if
you’re sure that your kids will attend an in-state public university and it allows
you to pay for tuition credits in advance.
Life Insurance
Another
great financial decision you can make for
your family is getting life insurance. This
can spook people out if they feel doing so is a bad
omen, but death is an investable reality everyone is going to have to face.
What you don’t want is to have your kids burdened with financial difficulties
if you leave earlier than anticipated. To avoid this, look into best term life
insurance, so they have some financial support if the unexpected happens. The good thing is that you could choose to get it for a term of 5, 10, 20 or 30 years.
Emergency Fund
Rainy
days are going to happen more often than you’d like, but they aren’t so bad if
you’re well prepared for them. To protect your family’s wellbeing, always have an emergency fund stashed away that you
can access in the case of financial downturns.
Doing so should serve as a security net in the case of unemployment, major
fixes, or unforeseen medical expenses. To actually
have enough in your emergency fund, you may need to learn to be more frugal and
cut down on leisure expenses.
Investing
Warren
Buffet himself advises that people invest in low-cost
stocks and bonds, so this is an option to try. You could even buy stocks for under $10, but it’s advisable that
you stick with industries you have knowledge
on. Get a brokerage firm or financial
advisor to give you advice in this regard. However, you want to know that when
you retire, you have passive income and won’t be a financial burden to those
around you.
Ultimately,
you want to make financial decisions that benefit the entire family. Even
though you may not be able to control the future, you can influence it by making
the right choices.