Why it’s important to build a financial legacy
In the world of finance, things can be confusing at times because of the amount of information out there. Figuring out what to do for yourself can feel difficult, and adding a child to the picture makes it more so. You want to protect the bundle of joy you brought into this world, create opportunities for them that weren’t accessible to you, and start building their financial legacy. There are many choices for you to find what fits your family, but at the end of the day, it all begins with making a plan.
How to make a financial plan
The easiest way to start making a financial plan is to find a financial professional that you can trust, who is knowledgeable and relatable and can grow with you throughout your family’s journey in life. Talking with your advisor should be the next step once you decide to bring a child into the world.
Create a budget: an easy first step to secure a financial legacy
A budget needs to be created. Knowing and understanding how household income and expenses will change is essential. By doing this, you can build an emergency plan and start to understand the importance of it. An emergency fund should include at least three months of living expenses to help cover the family if something unexpected happens.
Purchasing insurance and writing a will/trust
Next, it’s important to set up life and disability insurance for both parents. In most cases, with the loss of one parent, the other must work double to maintain the same lifestyle, which takes time away from the family; life insurance can help that. Getting disability insurance helps to create a safety net because if a parent ever gets sick or injured, they can still earn an income. It is also key to set up a will and a trust; these will ensure your vision for your family continues after you’re gone.
Plan for educational goals and consider insurance for the child
Regarding the children, there are a few things to remember – college planning and permanent life insurance. It’s important to begin the conversation about educational planning early. Parents/guardians should have a chat to decide what educational goals are for the child, consider the costs, and start developing a financial plan around those conversations.
One of the most vital ways to begin your children’s financial legacy is by getting them a permanent life insurance policy. One of the benefits is that this policy has a cash value guaranteed to grow over time, tax-deferred. Additionally, this will lock in a child’s insurability from a young age. Therefore, if anything were to develop over their years of life, a child is already protected and insured.
Ultimately, having a child starts with the parents deciding to plan for both the expected and unexpected future.
Building a financial legacy with a financial professional
“Jovane Parkinson is a financial professional with Northwestern Mutual Orlando. He’s developed a passion for working with families, business owners, and professional athletes, educating them on products and tools they can use to create the financial future they want for themselves. Along with that, Jovane helps his clients to create a financial legacy to pass down to future generations. When he’s not in the office, Jovane loves giving back to the community and enjoys time off. He is an active member of the Lake Nona Rotary Club and volunteers as a member of multiple non-profit organizations; he loves watching sports, being with family, and eating delicious food.” http://jovaneparkinson.nm.com/