Smart Investment Moves for New Parents
The birth of a baby is a great time to focus a little attention on your long-term goals and dreams. After all, you want everything to be perfect for your little one today — and tomorrow. Here are some key investment moves you can make now to ensure a bright future for you and your bundle of joy.
Sign up for a College plan
College costs aren't likely to become more affordable over the next 18 years. By acting now, you can pay for a great education in baby steps rather than having to make giant leaps later on. Tax-advantaged college savings plans let you take a deduction for money you set aside for your child's education. Because you don't pay taxes on the money you invest or on the earnings, your dollar goes much further. And with 18 years of investing a little each month, the account will grow as fast as your baby. Just sign up for automatic investments and you won't ever have to worry about it again.
Put savings on autopilot
As your child grows, you'll probably find yourself dreaming of a larger home or a vacation at Disney World. Start saving a little from each paycheck now and you'll likely have the money to fund those dreams by the time you're ready to act on them. And by having the money taken out automatically before you get your paycheck, you'll never miss it.
Update your estate plan
Even if your current "estate" is little more than a five-year-old car and a collection of comic books, you need to have a plan to control what comes next if the worst should happen to you or your spouse. A good financial advisor can help you devise an estate plan — which is much more than a will — that protects your loved ones from unnecessary expenses, taxes and anxiety.
Reassess your life insurance needs
The beauty of life insurance is that you don't need a fortune to help guarantee your family's financial security. If you're a young new parent, you may be surprised at how affordable life insurance can be. By acting now instead of waiting, say, 10 years, you may be able to keep premiums well within your budget and enjoy peace of mind that's priceless.
Sign up for your employer's retirement plan — or increase your contributions
This may sound a bit selfish, but it's actually something you can do for your child. After all, if you reach retirement age without a nest egg large enough to pay your bills, who'll be left to pay? You may promise yourself that you'll never become a financial burden to your kids, but if you don't act on that promise starting now, it may become impossible to keep.
Take the next step...
Get ready for college. It's never too early to start saving for your child's education. The Principal Financial Group offers several options to assist you.
