Harness Money

We all have different partners. And these partners vary from person to person. It is important to make sure your partners are informed about your financial journey.

Parents, siblings, spouse, children, business partners, the community.

There are people that may depend on you or you depend on them.

I have parents and a sibling and a husband.

Communication is the key. They do not have to agree with you about everything. But it is a good idea that they be informed about what you are doing with your money.

Aging parents

My parents are aging and will need my help to take of them as they get older. Have the difficult conversation with them. Do they have all their documents in order and spelling out their wishes. Where are these documents and do you have access to them in case something happens? Where are they going to live? How much money do they need each month to live?

Preparing for old age gracefully is a form of love you show to other people.

Children

If you have children and/or a spouse that rely on you then you need insurance. I recommend Term Life Insurance while you children are still young and growing and cannot take care of themselves. I recommend avoiding whole life insurance, it is generally not worth the cost. Instead build up your investments during your working years and you will not need this type of insurance.

Investing for kids

– Custodial ROTH IRA – The child must have earned income and be able to invest that in their account.

– 529 Education plan – No limit to how much you can contribute. You will be investing this money in the market. It is up to you to take the money out of the market and leave it in cash as you get closer to the college age.

– UGMA – Uniform Gift To A Minor Trust Account – You contribute money into this account and manage the cash and/or investments until the child reach 18years old in most states and then the child takes over this account.

– You open a separate brokerage account and manage it for your child. Let your child drive the investments. Let them take over when and if you think they are ready.

The best thing you can give you child is not the money, but the education. Teach your child about compound interest and dollar cost averaging. Introduce money as early as possible and no matter what they become passionate in they will be able to invest and take advantage of their education.

Insurance

If you have children or a spouse or employees that depend on your then you should really consider getting life insurance.

Life insurance will protect them if something happens to you. But you must be careful and do your homework when getting the right policy. Make sure that the fees are appropriate and that the insurance is only for a limited amount of time.

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