Next, review your life insurance coverage. Shelly-Ann Eweka, director, Individual Advisory Services at TIAA was able to answer the question why having life insurance is so important. “Life insurance is a critical component of both estate planning and family planning. If your family depends on you, for either your day-to-day upkeep of the household or for your annual salary, a life insurance policy protects your loved ones in the face of an unexpected event or tragedy. While the exact amount of coverage varies from one family to the next, a life insurance policy should cover several years of your salary, plus enough to pay off all debts (including a mortgage), and cover some childcare expenses (including college).
Prepare for economic hardship
Stuffing an account with six to nine months’ worth of living expenses will be your best defense against economic hardship. How long will it take you to build such an account? Well, if you are just getting started and save 20% of your income per month it will take approximately 2.5 years to save 6 months’ worth of salary. Want to get there faster? Just increase your savings rate.
Eweka also shared an additional resource to prepare for economic hardship, “Disability insurance is often missed in the family planning process. Most employers provide coverage, but is that coverage adequate if you have a long-term disability?Â Determine the amount of disability you will receive and if it is adequate.â€
Starting a family can seem financially overwhelming at any age, but you can manage it all if you effectively assess, plan, and prepare.