New Faces...New Challenges

Starting a family can be at the same time among the most exciting, memorable and challenging periods of your life. The idea of responsibility reaches an entirely new level. Financial commitments are significant. Now, more than ever, taking a little extra time to make sure you are doing things right from a financial perspective makes sense. Here are some tips to get you started.

Be properly protected
Even if you already have life insurance coverage, your protection needs significantly change once children become part of the picture. Now, your family's financial needs have increased. The role your income plays in supporting not only today's needs, but tomorrow's plans, must be insured.

That means carrying the appropriate level of life insurance to meet your family's needs. For instance, a couple, both 30-years old with one making $50,000 per year and the other $25,000 per year, should consider that they will need sufficient life insurance coverage to protect their family if either should face an untimely, premature death.

Estimated lost income over working life
Accumulated lifetime earnings assuming annual earnings equal to today's income plus annual 4% salary increase
Spouse 1	$3,682,611
Spouse 2	$1,841,306
This is the amount of total earnings that could be generated from work, from age 30 through age 65.

With more mouths to feed today and more goals to achieve for tomorrow, you need to make sure that cash flow needs are met by owning sufficient insurance coverage.

Keep finances in order
As you make the decision to start a family, it makes sense to consider the financial impact on your family. For instance:

• What type of maternity/paternity coverage is available from your employer to help provide financial support in the months after a baby is born?
• How will your immediate cash flow needs be affected if only one parent continues to work fulltime, or day care expenses become part of the equation?
• How is the addition of another family member likely to affect your household expenses?
• How much money can you set aside for the child's future, such as college education expenses?

Investing for tomorrow
Now, more than ever, you need to get serious about your investments. The addition of children to your family financial picture raises important issues:

• As soon as you can, you want to begin setting aside money to help pay higher education costs for your children. The cost of college is rising dramatically, far faster than the standard cost of living. So the sooner you can begin saving, the better off your children will be.
• Don't neglect your future needs, particularly retirement savings. You may be tempted to cut back on the money you regularly set aside to fund your retirement. But remember, that the quality of your retirement is in your hands, so you need to keep saving to meet your goals.
• It may be required that you cut back on some of your normal expenses that may have been more extravagant in the past (that daily $4.00 cup of coffee or expensive lunches and dinners out) in order to put enough money away for future needs.

Content is for informational purposes only and may not accurately reflect your specific situation. Information is not intended to provide financial, legal, tax, or accounting advice. You should consult a qualified advisor for advice specific to your own circumstances.