My daughter celebrated her 12th birthday over the weekend. As I reflected on those twelve years it struck me, how lucky we are to have family and friends that are invested in our child’s well-being. Without this support network I don’t know how we would manage the enormous responsibility of raising a child. Having a child turns out to be a large financial endeavor as well. It costs an estimated $233,610 to raise a child to age 17, according to the U.S. Department of Agriculture.
During this weekend of reflection, I also came to a better realization of the village that must be assembled to care for family members that suffer from chronic and incurable diseases. From home health aids to occupational therapists, the professional “team” that is assembled can become family and friends that are relied on to help care for our loved ones in need. In the case of children with special needs and developmental disabilities, these costs really add up. For example, Autism Speaks estimates that the lifetime cost for a person with autism is between $1.4 and 2.4 million.
How to ensure your child is always supported financially
Begin the planning process as soon as possible. There are a lot of resources available to help all families, but planning for what lies ahead is very important. Here are some steps that you can take to ensure that your entire household is set-up for future success:
- Develop a financial plan
A solid financial plan will help your family understand the financial realities of the household. Ensure the plan takes into account the goals of all family members, including retirement, future education, and medical costs.
What if scenario planning will also be important. For example, you may want to explore the consequences of a family member becoming a full-time caregiver.
A financial plan developed by a personal financial advisor will cost between $1,500 and $5,000. Financial tools, like those developed by Iryss, can get you started for a fraction of the cost.
- Confirm you have adequate life insurance
In our experience, families do not carry enough life insurance. Your financial plan should help frame the term and amount of insurance that your family requires to meet the financial obligations of the household in the event of your death.
At the very least, you should have a total death benefit that is equal to ten times your salary. The death benefit is the amount of money that will be paid to your beneficiaries when you die. Now you can structure your term(s), the amount of time the insurance policy is in place, in many ways depending on the costs of the policy (the premium).
Life insurance can get confusing and we have seen many people make unwise choices that end up costing them a lot of money. It’s really important that you work with an insurance provider that you can trust!
- Execute a Will
What will happen to your child if something happens to you before they turn 18? Are your intentions clearly laid out in a legal document? If you’re like most young parents then the answer is “NO”. This can create a headache for your loved ones in the event of your death. Don’t leave it to your family, and the court, to battle about your intentions. Clearly articulate them in a document and let your loved ones know where they can find it. It doesn’t have to be an overly complex, or expensive, situation. Just get it done!
Ensure the families financial best interests are protected
It’s important that you surround yourself with a village that you trust, like family, to ensure you are doing everything possible to meet your financial obligations and goals. Iryss’ personal finance platform can help you improve your financial health and take control of your financial future. Sign up for early-access and benefit from exclusive discounts and benefits.