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September 2011 Moms
Money Survey--life insurance, will, college savings, etc.
I thought I would just try to include as many of these issues as possible in one post.
So we have a 401k, Roth IRAs, and just started a (very small) college savings fund. I'm trying to figure out what steps we need to take to protect ourselves and this future LO.
1. Do you have any books/websites you recommend for general financial planning with a LO on the way?
2. Have you purchased life insurance or researched it? If so, what have you decided to do, and what resources did you use to make your decision? How much per month are you paying for how much coverage?
3. Have you thought about a will of any kind? If so, what resources did you use to make your decisions? If you're not making a will at this time, what was your reasoning?
4. Have you thought about or started a college fund? If so, how are you saving the money right now (ie 529, savings acct, bonds, etc.)? How did you decide how much to allocate to the fund? Where do your savings come from (ie auto. deducted from paycheck, keep the change programs, etc.)? How much are you saving per month?
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Re: Money Survey--life insurance, will, college savings, etc.
1. Do you have any books/websites you recommend for general financial planning with a LO on the way? No but I'm curious to hear other's suggestions. We have a financial planner so I usually just ask him when I have questions.
2. Have you purchased life insurance or researched it? If so, what have you decided to do, and what resources did you use to make your decision? How much per month are you paying for how much coverage? Yes, we have $250K in covereage each for 30 year terms, plus DH has $50K through his work. We pay $34/mo total.
3. Have you thought about a will of any kind? If so, what resources did you use to make your decisions? If you're not making a will at this time, what was your reasoning? We both have wills...we're attorneys so if either of us died without one, we'd look like idiots.
4. Have you thought about or started a college fund? If so, how are you saving the money right now (ie 529, savings acct, bonds, etc.)? How did you decide how much to allocate to the fund? Where do your savings come from (ie auto. deducted from paycheck, keep the change programs, etc.)? How much are you saving per month? We will not start a college fund. I read somewhere (I can't remember b/c it was a year ago), that you're better off investing more money in your retirement account that saving for your kids college because of inflation and the rising cost of college. DH and I both paid our own way through school, and I feel like it made us appreciate our education more. When the time comes for our children to go to college (if that's what they choose) we will help in any way we can. In the meantime, my money will be growing in my 401K and IRA.
AHHHHHHHHH
I am still focused on paint colors! I can't think this far ahead!
.................although I should start.
1. Do you have any books/websites you recommend for general financial planning with a LO on the way? No, we work with a financial advisor.
2. Have you purchased life insurance or researched it? If so, what have you decided to do, and what resources did you use to make your decision? How much per month are you paying for how much coverage? We intend to purchase LI but have not yet. Our FA referred us to an insurance guy.
ETA - I also have a small LI policy through work.
3. Have you thought about a will of any kind? If so, what resources did you use to make your decisions? If you're not making a will at this time, what was your reasoning? We will have a limited will that deals only with custody issues. The law in CA sends all financial things to first the spouse then the child, so more is not necessary at this time.
4. Have you thought about or started a college fund? If so, how are you saving the money right now (ie 529, savings acct, bonds, etc.)? How did you decide how much to allocate to the fund? Where do your savings come from (ie auto. deducted from paycheck, keep the change programs, etc.)? How much are you saving per month? We are doing a 529 and I highly recommend them. Tax free and can be transferred between children if say one child gets a scholarship or decided not to go to college. We are starting with a base amount and then we will be contributing to it monthly. We are using stocks to fund this for the time being but will probably take a direct deduction from the paycheck starting in 2011.
1. Do you have any books/websites you recommend for general financial planning with a LO on the way?
Not really. Maybe Suzie Orman? I personally like Yahoo Finance, they usually have good links to blogs.
2. Have you purchased life insurance or researched it? If so, what have you decided to do, and what resources did you use to make your decision? How much per month are you paying for how much coverage?
We are in the process of applying for term insurance. It's the biggest bang for your buck and this is the stage of your life when you need the biggest death benefit. We're each doing $300K policies and 20 year terms. We're doing an annual premium and I'm drawing a blank on what the premium is, but it's reasonable.
3. Have you thought about a will of any kind? If so, what resources did you use to make your decisions? If you're not making a will at this time, what was your reasoning?
We haven't but we should for guardian reasons.
4. Have you thought about or started a college fund? If so, how are you saving the money right now (ie 529, savings acct, bonds, etc.)? How did you decide how much to allocate to the fund? Where do your savings come from (ie auto. deducted from paycheck, keep the change programs, etc.)? How much are you saving per month?
We'll be doing a 529 plan and do an auto contribution each month, probably $50-$100 depending on how our budget looks after the baby gets here.
Great topic!
1. Do you have any books/websites you recommend for general financial planning with a LO on the way?
Not really---we have a financial planner who helps us and we ask family members a lot about general planning stuff.
2. Have you purchased life insurance or researched it? If so, what have you decided to do, and what resources did you use to make your decision? How much per month are you paying for how much coverage?
We both get life insurance through work up to 4x our salary. Its included with our benefits, I think. Right now, we have savings/high yeild savings that will hopefully go towards a house someday/403b (same as 401k but we work for nonprofits).
3. Have you thought about a will of any kind? If so, what resources did you use to make your decisions? If you're not making a will at this time, what was your reasoning?
Yes, we are working on setting up a will. My mom does family law so she is helping us find someone to do the paperwork but we have made all the decisions necessary for it. The other thing we are both doing is a health care proxy form (If something should happen to me, I don't want DH to have to make difficult decisions because he would feel responsible. My dad can be much more objective and knows what I want/it is similar to what he wants so I think all would be happier in the long term if needed).
4. Have you thought about or started a college fund? If so, how are you saving the money right now (ie 529, savings acct, bonds, etc.)? How did you decide how much to allocate to the fund? Where do your savings come from (ie auto. deducted from paycheck, keep the change programs, etc.)? How much are you saving per month?
We will start a 529 after we have a social security # for LO. At this point, we don't have much left over to put into it, but will put in any gifts, etc and try to put something in for now. My parents paid for my education (college and med school) and it was a tremendous gift for me; not having major loans is what allows us to save at all right now and we wouldnt be able to afford a child if I did. On the other hand, DH had a lot of loans that we paid off right before our wedding with my savings. Hopefully we can the same gift to our kids. Once I am done with my training (forever from now), we will be able to put a lot more towards this.
This is true - you should not be saving for college at the expense of your own retirement savings. You can take out a loan to pay for college, you can't take out a loan to pay for retirement. (Although I've given my mother this lecture and she says she'd rather work longer and be able to help my brother with college ...)
Max out your employer match on your 401Ks at work and then max out your Roth contributions ($5K a year) and then if there's money leftover, put some towards college savings for the kids.
Yep, we both max out our contributions. In our situation, we are both new lawyers and our income will grow considerably in the years to come. Right now, it's not much, but our up-end potential is pretty substantial. By the time our kid is ready for college, I anticipate that we will have the money to pay for their education, or at least part of it.
Thanks ladies! Yeah, I know about making retirement a priority. We max out our Roths and match the 401k. Currently we're only putting $50/mo. into college. That's all we're willing to do right now, but we will slowly increase this number as we have more kids, make more money, etc.
As for life insurance and wills, we haven't done anything yet, which was why I wanted to pick your brains to get started. I'm checking out some books from the library and my goal is to have a will and life insurance in place by the time LO gets here.
I'm with you... and my 1st is almost 2!
Life Insurance- We both have term policies and also additional amounts through work.
College Planning- Great Grandma will give a starting check at birth for a 529 plan, and then we will add to it monthly. I think our budget only supports about $100/month to start and we will see what we can afford later as the baby gets older.
Will- I have an attorney's name that I got referred to and we will set a meeting with him when the baby is born.
Retirement- We max what our employers match, and then we each have contributions to Roths. When we get raises, we increase what we put toward the Roth's each year.
We are looking into college plans at the moment to pick one we like. I started my Roth IRA when I was 18 and will keep putting into that. I've maxed out this year with my retirement and plan to always do so. I plan on paying for child's college though there is a contract that goes with this money. Just like one I had. I will always put retirement, savings, college first. Even if it means I have to give up something else that isn't as important.
Right now I'm trying to start my husbands retirement and start the ball moving. I will say because I don't have loans and his is paid for through the GI Bill is the only way we are surviving now both being unemployed at the moment.
1. Do you have any books/websites you recommend for general financial planning with a LO on the way? No, DH and I are really good with money, so I don't feel the need to hire a financial planner.
2. Have you purchased life insurance or researched it? If so, what have you decided to do, and what resources did you use to make your decision? How much per month are you paying for how much coverage? DH has a policy for $400,000 and I have one for $100,000. We pay $30 a month for it.
3. Have you thought about a will of any kind? If so, what resources did you use to make your decisions? If you're not making a will at this time, what was your reasoning? We have a will. DH is military so it was a must.
4. Have you thought about or started a college fund? If so, how are you saving the money right now (ie 529, savings acct, bonds, etc.)? How did you decide how much to allocate to the fund? Where do your savings come from (ie auto. deducted from paycheck, keep the change programs, etc.)? How much are you saving per month? College for this LO is already paid for through DH's GI Bill. Thanks military!
We are huge Dave Ramsey fans here. https://www.daveramsey.com/home/?ictid=glp2.header_dr
We started a college savings fund before our first kid was even conceived. LOL We've not been putting much into it lately though. Since I don't work anymore, we don't have as much expendable money. We do Upromise as well. upromise.com
Plus, we've been paying down our debt for the past 4 years and our goal is to be completely debt free in the next year and a half. In the meantime, we've been working on our emergency fund, putting money into hubby's retirement, and we have a life insurance policy for him. What you'll pay each month will be based on your age and health and they DO do health screenings. I'm thinking about maybe getting one for myself soon too (much smaller), but it was most important to get his in place because he's the bread winner and w/o him, we'd be in worse shape than the family would be w/o me. From a financial perspective, that is. We also have things lined up for IF something were to ever happen to both of us, who would take care of the kids, etc.