Planning for the future can sometimes seem overwhelming, especially if you have kids to think about. Saving money for college, making preparations for your estate, and ensuring that your loved ones are taken care of after you’re gone are all difficult things to think about, but they are also very important. There are many details to consider, and you may need the input of your friends and family when all is said and done, so it’s a good idea to start thinking about these things sooner rather than later.
This type of planning can also require the assistance of legal counsel, and you’ll likely need to do some research, so be prepared. Sit down with your spouse or partner and think about where you want or expect to be in five years, and also consider the future needs of your child. Although no parent has a crystal ball, you can still plan for some contingencies.
Here are a few of the best ways to plan for the future and make sure your kids are well taken care of.
Think about what your role will be
If you have very young children, this might prove a bit more difficult than it would for other parents, but the goal here is to think about what the options are. If your child goes to college, she’ll need tuition, money to pay for books and supplies, and a living arrangement.
Whether or not that involves living in a dorm or at home with you will ultimately be a decision you’ll all need to make at a later date but take those things into consideration when planning for their education. Your family may qualify for financial aid and various grants (which don’t have to be paid back), but it’s best not to count on those as every state has different guidelines and you have no idea where you’ll be financially at that stage.
Look into options for saving
If you haven’t started saving yet, don’t worry; it’s never too late. Set up a special savings account that’s dedicated to your kids or start one in their names now and add to it every payday. You can also ask relatives to contribute at birthdays or holidays instead of buying physical gifts.
There’s also something called a 529 college savings account, which has special tax benefits for you but requires your child to use it specifically for college, meaning if she decides not to go, the entirety of your money might not be available to you. Talk to a financial advisor who has experience with this type of account to make sure it’s right for you.
Investing your money can be a bit complicated, so it’s best to go to an advisor who can help you figure out what to invest in. Putting your money into something for the sole purpose of watching it grow means you need to find something with minimal risk, so consider investing in real estate or a money market fund.
Write out a will
No matter what your age or what your health is like, if you have children it’s always smart to have a will or living trust that will ensure they are taken care of in the unlikely event of your death. With a living trust, your loved ones can avoid having your estate going into probate, which involves a lengthy court process. It’s important to be very specific in the terms of your will regarding your estate and the person or persons appointed to oversee the care of your children if they are under 18 years of age, so seek the assistance of a lawyer who has experience.
It might feel overwhelming at first to think about all the details that go into planning years down the road but remember that this is all for your loved ones. Get some advice from friends or family members who have already been through it to find out what they might have done differently.