1.
Not enough life insurance: Making sure that your dependents will be taken care of is not just the right thing to do, it gives parents peace of mind to focus on other things.
Getting the insurance that your employer provides is usually not enough and new parents should have at least $500,000 in life insurance.
Also, if you are young and healthy, you may get insurance that is as good or cheaper than any group policy and it is portable if you leave your job.
Term insurance is OK if you are starting out but be prepared to upgrade to permanent insurance which could do double duty as an investment if done right.
2.
Not buying disability insurance: It is statistically more likely that you will be disabled than die so it is even more important to have this coverage in case your family loses your income, either temporarily or permanently.
You need to figure out how much you will need but most employer-sponsored plans pay about sixty percent of income.
This is OK if you are making $100,000 but if you are making more, you may need supplemental coverage.
3.
Delaying College Savings: It is never too early to start saving for your children's college and there are some great deals available courtesy of Uncle Sam.
The best time to start is when your child is born and it is usually too late if your child is entering high school.
The best account type is the 529 college savings plan from your state.
4.
Ignoring retirement savings: It is easy to get side tracked with all the savings you are doing for your baby but this is going to cost you dearly.
The most important and valuable commodity you have is TIME.
Multiply that with the tax savings that the government gives you for IRAs and 401(k)s and you stand to leave a lot of money on the table if you do not maximize your retirement savings from as early as you can.
5.
Not having a will: Not having a large estate is no excuse for not having a will.
If you have a child, a will is absolutely necessary in order to designate guardians in case you and/or your spouse die prematurely.
Otherwise, the court will appoint a guardian.
It does not cost much, maybe $500, so do it now.
You will feel a weight leave your shoulders that you never knew was there.
Not enough life insurance: Making sure that your dependents will be taken care of is not just the right thing to do, it gives parents peace of mind to focus on other things.
Getting the insurance that your employer provides is usually not enough and new parents should have at least $500,000 in life insurance.
Also, if you are young and healthy, you may get insurance that is as good or cheaper than any group policy and it is portable if you leave your job.
Term insurance is OK if you are starting out but be prepared to upgrade to permanent insurance which could do double duty as an investment if done right.
2.
Not buying disability insurance: It is statistically more likely that you will be disabled than die so it is even more important to have this coverage in case your family loses your income, either temporarily or permanently.
You need to figure out how much you will need but most employer-sponsored plans pay about sixty percent of income.
This is OK if you are making $100,000 but if you are making more, you may need supplemental coverage.
3.
Delaying College Savings: It is never too early to start saving for your children's college and there are some great deals available courtesy of Uncle Sam.
The best time to start is when your child is born and it is usually too late if your child is entering high school.
The best account type is the 529 college savings plan from your state.
4.
Ignoring retirement savings: It is easy to get side tracked with all the savings you are doing for your baby but this is going to cost you dearly.
The most important and valuable commodity you have is TIME.
Multiply that with the tax savings that the government gives you for IRAs and 401(k)s and you stand to leave a lot of money on the table if you do not maximize your retirement savings from as early as you can.
5.
Not having a will: Not having a large estate is no excuse for not having a will.
If you have a child, a will is absolutely necessary in order to designate guardians in case you and/or your spouse die prematurely.
Otherwise, the court will appoint a guardian.
It does not cost much, maybe $500, so do it now.
You will feel a weight leave your shoulders that you never knew was there.