 | | New Baby Checklist | | | | To keep yourself on track to healthier personal finances,
start here by setting due dates for your own financial to-dos. Click the button
next to each item to add it to your Yahoo! Calendar or
print out this checklist of
to-do's and check off each item as you complete it. Get ready to
face your
financial fears today!
For more information on each item, refer back to Suze Orman's article:
"Baby-Proofing Your
Finances". | |
|  | |
| | If you are young and expecting a baby, take a look at Level Term InsuranceThere are a variety of types of insurance on the market, but you can make the shopping easier by focusing on what is
known as Level Term Insurance. As the name implies, you will be covered for a certain "term" of time, anywhere from 1
to 30 years. If you live out the length of the term, you get nothing at all. The primary reason to buy life
insurance, in my opinion, is to make sure that while you are young and
haven't had a chance to build up your assets, you still have a way to protect those who are financially dependent
upon you in case you die unexpectedly. As you get older and hopefully acquire more assets, and as your children
become independent, the need for insurance steadily lessens and may even disappear completely. | | | | | |
|
|
| | Calculate how much insurance you need and how long you need it forLet's say you want to make sure that should you die your beneficiary would have an income of $100,000 a year for the
rest of their life. That means you want a death benefit large enough to generate $100,000 in annual income. To
figure that out just multiply the yearly amount of income you want your loved one to have by 20. In this case,
$100,000 a year multiplied by 20 equals $2,000.000. Next, you need to decide how long you want your policy to last.
That's what is known as the term. You should choose a term that lasts until your youngest child is about 24 years of
age. | | | | | |
|
|
| | Draw up a willYou need a will. Plain and simple. The will is pretty basic: it lays out where
your assets are to go if you die. | | | | | |
|
|
| | Get a revocable trust with incapacity clauseOkay, since I don't think a will and simple POA provide enough protection, what do I suggest you do to protect
your little bundle of joy? A revocable trust with an incapacity clause. This document spells out how you want
your financial life managed if you become incapable of making the moves yourself. When you die, the trust will
be the template for how you want your finances handled. If you happen to die when your child is a minor, this
will take care of their well-being and allow your family to avoid going through probate guardianship. | | | | | |
|
|
| | Have durable powers of attorney documents for your finances and health careNow I know some of you may have heard that having a power of attorney document in place will ensure your financial
affairs are taken care of if you become incapacitated. Not so fast, my friends. You must have a durable power of
attorney if you want someone to handle your affairs in the event you become incapacitated. A regular POA is
useless the moment you become incapacitated. The DPOA for Health Care outlines your wishes regarding how doctors
should proceed if you are severely ill and
need life-support. | | | | | |
|
|
|
