The Importance of Financial Plans

Financial planning is a pain, but it’s necessary to do. It becomes even more important when you have children relying on you. You need to be able to teach your child how to plan, and you’ll want to have the resources to care for them without compromising your—or her—financial future.

Planning for the future can encompass things as simple as saving for a car, a home, or your retirement. Maybe you have a savings account, a Roth IRA, or diverse assets managed by a legion of wealth advisors.

Regardless of your situation, raising a child to age 18 is costly. Saving for their education will take planning, even if they earn scholarship money. Perhaps you want to be financially involved later in their lives, saving to help them pay for a wedding or the down payment on their first home. No matter the age of your child, it’s important to start thinking about those things now. Whether you want to meet with a financial advisor or take a stab at organizing your assets on your own, you should have a plan in place.

While it may be uncomfortable, part of planning for the future means having financial plans in place fo the siuation you will leave for your children should you die. If this includes a mortgaged home and lots of debt, perhaps you want to work on getting yourself out of the hole. The more complicated and disorganized your assets are, the larger the burden you are creating for your child.

Having a notarized will is one very helpful thing you can do. Life insurance is another tool to consider. A Certified Financial Planner can help you get yourself into the right financial place to provide for your child in the event something tragic happens. If you are looking for some online options to read into for the time being (as I don't recommend they comprise all of your knowledge when making plans), the Wall Street Journal and Let's Make A Plan organization both have very interesting takes on the subject. Whether or not you choose to leave your child any of your assets, be sure not to leave them loose ends.

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