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The Wise Choice Blog

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Essentials Every Parent Needs for Financial Planning 

October 28, 2020

As a parent, you would do anything to protect your children. So why wouldn’t you take a few simple steps to ensure financial stability for your family? Financial stability can create a more positive environment for your children and less stress for yourself. If you’re ready to get started with your financial planning, here are essentials you need to include.

Life Insurance and an Estate Plan

If you have children, you also need to have an estate plan. That estate plan should outline essential financial details, like how your life insurance and other financial benefits will be used to care for your family, as well as vital designations for the care of your children, including the appointment of legal guardians.

Once you have these details worked out in the necessary legal documents, you may also want to consider different life insurance options. Talk to Wise Choice Insurance Brokers to survey the different types of policies. For example, you may find that applying for term or whole life insurance for you or your spouse could be your best bet. Term life insurance tends to be more affordable, although you are only covered for a certain period of time, while whole life insurance comes with more financial leverage, including the ability to cash out your policy to cover unexpected expenses.

Enough Savings for a Down Payment

Are you planning to buy a new home for your family? If so, you will want to research mortgage options that can best fit your budget. You can look into home loans that offer financing with no down payment, though saving up for a down payment on your new home can help lower your interest rates, reduce your monthly payments, and avoid additional expenses associated with paying for mortgage insurance.

You may be wondering how you can manage to save up enough for a down payment when you are also juggling the costs of raising children. With a few budget tweaks, you may be able to pinch a few more pennies and put the savings toward your future home. For instance, if you have cable, swap it for a cheaper streaming service, and use meal planning to keep family grocery costs low. As you trim your budget, you can also put those tips to work to help beef up your emergency savings fund.

Solid Financial Plans for Retirement

Retirement should be a top priority NOW. While it may seem far away, the longer you wait to put away savings, the less you’ll have when the time comes to retire. While your immediate financial needs are important, so is your financial future. Make a point to regularly contribute to a 401(K), IRA or other retirement funds.

If you or your spouse are serving in the military, you may be banking on a government pension to fund your retirement plans. While retiring from military service can definitely provide some big boosts for your finances, both now and in retirement, that monthly pension still may not be enough to cover the rising costs of healthcare and living that you can expect to face as a senior. Healthcare expenses can be especially burdensome for seniors, even with access to VA medical care, so you should plan to put away some additional savings for your healthcare costs in retirement. Remember, by saving for your retirement now, you can ensure a more stable financial future for yourself and your children.

Keeping your children healthy and happy is one of your main priorities as a parent, and keeping your finances stable can help you do so. Plus, by creating a sound plan for your finances, you will be giving yourself some needed peace of mind. So sit down with your partner and figure out a financial plan for your family. 

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