Mar
23
2008
5:25 pm

When One Plus One Equals Three

This is a guest post courtesy of nationalpayday.com

Math is easy when there’s only two of you, but that two can quickly result in a third little one who adds a whole new dimension to your financial planning. There’s no doubt that planning for the future becomes much more complicated when there are children involved. The cost of raising children is a major expense and most families now require loans to send their children to college later. A childless couple will often have two incomes and no dependents, but a couple with one child faces the addition of a dependent plus the potential loss of income, should a parent decide to stay home.

The basics of a fundamental support plan for your children won’t just include college costs, but also health and disability insurance too. What will happen to your family should one of them fall ill or become disabled or die? These are financial questions which are much more important when the surviving spouse has a dependent to worry about. So, you should be sure to always carry enough health, accident, and life insurance to help your family survive in the event of either spouse’s sudden disability or death.

While it might be nice to use extra funds for lavish vacations, you do have to start saving for your children’s education early. You don’t want to have to take out loans from your 401K to fund a college curriculum. Instead, put aside additional monies each paycheck in state sponsored 529 plans that allow you to save money for college either in the form of prepaid tuition plans or as designated college savings. Depending on which you choose, your child can have a choice of colleges or already have prepaid tuition at particular colleges. Be sure to check to see what happens to the funds should they not be used, but most of the time these plans are a great way to prepare for your kid’s future.

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