Every single parent should follow these 5 easy money moves to make sure their kids are on the path to success. Some of these FEEL like difficult To-Do list items that really aren’t difficult at all. Others are simple life hacks that can change your world drastically. All of them will benefit you, and your kids, financially down the road.
Get Term Life Insurance
This is a no brainer when you have kids. Life insurance is important, but you need to think about the purpose of your insurance policy and what you want it to do for you. In simple terms, a term life policy is a band-aid. It says that between year x and year y if you die, a beneficiary will get so many dollars. Term life is better than whole life because it is much cheaper and you can get a higher benefit for far less commitment. Whole life carries a huge price tag that may be crippling for a single parent that struggles financially. With whole life insurance, you get far less and the financial commitment could be hard to keep up with. The main purpose of life insurance is to provide for your kids in case something happens to you. Evaluate what your kids would need to have covered financially in the present day (think contributions to caregiver expenses for rent/mortgage, kids’ clothing, food, schooling, extracurricular activities, etc.) and what they would need in the future (think college or a car) in the event of your passing. Also, think about how long you would need that coverage for. A 20-year term may be too long (and add to your monthly expenses) when a 10-year policy would be sufficient. If you buy more coverage than you need and for longer than you really need then you could be throwing money away, regardless of what anybody tells you about cash value.
Cut Some Pie
Look at a pie chart of your expenses. You need a piece of that pie. If you do not start to prioritize yourself, you will never get a chunk of your own pay. That doesn’t mean spending money before you get it. It means automatically allocating a portion of what you make to a savings or an investment account. The same principle goes for setting aside money for your kids. Do whatever it takes, from giving up lattes at work to meal-prepping at home to make sure you set it aside. If you are using a credit card instead of a debit card, it’s time for a Spending Fast to start bringing that credit card balance down so you can take a bigger slice for your child’s future.
Become a Social Butterfly
Not everybody is social. In fact, as a society, we’ve become way too comfortable with machines intermediating between our social interactions. Social media can be a good networking tool, but it’s no substitute for getting institutions where you are bonding with other people in the real world. Forging relationships with others IRL is the best way to find out about opportunities that could improve your financial situation. Either way, whether you join a church or a club, or whether you join some community groups on Facebook, get active and engage wherever you can and seek out potentially beneficial change.
Reevaluate Your Work-Life Balance
At some point, the pursuit of happiness became the hunt for work-life balance. It’s a myth that has us endlessly circling on the merry-go-round. The best chance you have at achieving work-life balance is through work-life integration. If you can make your life your work, or vice versa, you will unlock nearly limitless potential. If you are dividing too much time between work and family while trying not to let anything give, your struggle will tear you apart and leave you completely exhausted and unfulfilled. Look for ways you can overlap work and life even just a little bit in order to optimize your earning potential and your ability to parent. This could mean finding ways to work from home, even if it means fewer hours with your 9-5.
Get Your Documents In Order
This is as adulting as it gets. Even if you have life insurance, nobody likes to do the legal work of protecting your estate after you die. It’s one of the most important things you can do as a parent. It’s very responsible, AND it’s suuuuch a bummer. Thinking about what would happen and what you want to happen can be really tough to consider. It’s enough to make you just decide to not ever die.;) You can’t do that by the way, but that’s the trap so many of us fall into when we just don’t want to deal with it. Making the decision to follow through with your last will and testament is hard, but actually doing it is very easy. It’s something you just have to commit to and do for the sake of your kids because all it takes is putting it off just one day too long.
Pro Tip: If you live in Colorado, you can reach out to my brother, James Newell for your estate planning. He’s an attorney that does wills and trusts and not only is he a great person, he’s also awesome to work with!