Money Matters
Presented by: Community Partner Vision Financial Group
Parenthood can be both wonderfully rewarding and frighteningly challenging. Children give gifts only a parent can understand- from sticky-finger hugs to heartfelt pleas to tag along on Saturday morning errands. You raise them with a clear goal that you secretly dread will take place- that someday they will be grown, independent, and ready to move out on their own, and your work will be over.
How expensive is raising a child? The U.S. Department of Agriculture estimates that the average nationwide cost of raising one child in a two-parent family from cradle to college entrance at age 18 ranges from $174,690 to $372,210, depending on income. (Source: Expenditures on Children by Families, 2015, released January 2017, the most recent data available) Here are four tips for planning ahead:
1. Reassess your budget. As your family grows, you may need to make changes to your budget. Many living expenses may increase, including grocery, clothing, transportation, healthcare, insurance, and housing costs. You may also need to account for new expenses, such as childcare, or adjust your budget to account for a decrease in your income if you decide to become a stay-at-home parent. Your budget may also need to expand to include new financial goals, such as saving for college or buying a home.
2. Review your life insurance coverage. What would happen to your children if something happened to you? Life insurance is an effective way to protect your family from the uncertainty of premature death. It can help assure that a preselected amount of money will be on hand to replace your income and help your family members maintain their standard of living. With life insurance, you can select an amount that will help your family meet living expenses, pay the mortgage, and even provide a college fund for your children.
3. Start building a college fund now. According to the College Board, for the 2018/2019 school year, the average cost of one ear at a four-year public college is $25,890 (for in-state students), while the average cost for one year at a four-year private college is $52,500 (the total cost of attendance includes tuition and fees, room and board, books and supplies, transportation, and other miscellaneous costs). Even if those numbers don’t go up (and they are expected to continue increasing), that would come to $103,560 for a four-year degree at a public college, and $210,000 at a private university. College costs may seem daunting, especially if you’re still paying off your own college loans, but you have about 18 years before your newborn will be a college freshman. By starting today, you can help your children become debt-free college grads. The secret is to save a little each month, take advantage of compound interest, and have a sum waiting for you when your child is ready for college.
4. Keep saving for retirement. Many well-intentioned parents put saving for retirement on hold while they save for their children’s college education. But if you do so, you’re potentially sacrificing your own financial well-being.
-Hal B. Holland, Jr., RFC®
4505 Pine Tree Circle,
Birmingham, AL 35243
205-970-4909
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Investment Advisory services offered through Investment Advisors, a division of ProEquities, Inc., a Registered Investment Advisor. Securities offered through ProEquities, Inc., a registered broker-dealer and member of FINRA & SIPC. Vision Financial Group, Inc. is independent of ProEquities, Inc.
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