The term “estate planning” is quite intimidating to most people, and it is a common mistaken belief that only the wealthy need concern themselves with estate planning. This couldn’t be further from the truth. Without an estate plan, your assets could end up in probate court, which in some states is backed up for years. To ensure a smooth transition of your assets to your loved ones, the distribution of your assets in accordance to your wishes, and to mitigate estate taxes, estate planning is absolutely critical.
The greatest gift you can give your children is your own financial security. Take care of your own retirement planning, life insurance needs and debt reduction before contributing to your child’s college savings plan. If you have the excess funds to contribute at that point, 529 College Saving Plans are a tax-efficient, flexible tool in helping to prepare for the cost of your child or grandchild’s education.
Information is power. As hard as it is to sit down and focus on your finances (especially when you know the news will be depressing), there is no easy way towards financial power. Isolating your basic living expenses, and then factoring in debt pay-down, savings rate, and luxury spending will empower you to live below your means, thereby creating true financial security.