Thinking About the Future

Now that I’m a mom, one thing that (unfortunately) has been on my mind a lot more often is my own mortality. I’m so much more aware of it because I can’t imagine Ethan growing up without one of us in his life–but if something does happen, we want him to be well cared for.

In thinking about the future, Eric and I sat down with a financial planner for some advice and advance planning. We’re not done with the process, but we feel like we have a handle on where we need to go from here. I’d like to share our process with you, and tell you about some of the choices we’ve made. I’m going to save retirement saving and budgeting for another post on another day, focusing here on the protections we’re putting in place for Ethan.

We feel lucky to have a financial planner we trust–he’s in the family, so using him was a no-brainer for us. If we didn’t, I think we would have been a little more clueless about the process. He told us we needed to think about life insurance, short- and long-term disability insurance, and making sure we have wills written that we keep up-to-date.

I’ll be honest. We haven’t gotten our wills written yet. And we haven’t gotten long-term disability insurance yet. But we’ve priced out both, and we’ve identified the attorney we’ll be using to write our wills. Working for the bar association, I feel very lucky that I can ask coworkers and volunteers for recommendations. (A shameless plug for one of the programs I run–if you need a referral in North Carolina, click here to visit the Lawyer Referral Service website where you can get a free referral.) Also, in the interest of full disclosure, I get short-term disability insurance through my work. Eric doesn’t have any yet.

The big piece of the puzzle that we’ve figured out is life insurance. It was our #1 priority because we know we don’t have many liquid assets that could provide for Ethan if something happened to us (in fact, with student loans and our mortgage, we have a very negative net worth right now). In looking at how much to buy, we looked at our debt load, and also looked at how much income we would need to replace if one of us were to pass. Ideally, if that were to happen, we would like to be able to have the surviving spouse have enough to live on without the deceased spouse’s income, and have enough to pay for Ethan’s living expenses and college expenses.

We ended up deciding on $500,000 policies for each of us, and I have a second policy through my work that provides a multiple of my annual salary if I die. This number will be totally unique for each person–this number works for us, but it may not work for you. We were pleasantly surprised to find that this size policy doesn’t cost much at all. Our financial planner was able to get us quotes from several reputable companies, and we were able to choose the one we were most comfortable using.

So, you might be asking, how does this apply to you? Well, if you have a financial planner, start with him or her. Make an appointment and discuss what steps you need to take to protect yourself. If you don’t have a financial planner, you have two options–the friends and family option, or the online search option. I always check with friends and family if I’m looking for a vendor, because I always hope that they can point me in the direction of someone they have a working relationship with, and who they trust. If this fails (which it sometimes does), then I turn to the web. There are far more options available now than ever before, and I’m able to subjectively evaluate each company or vendor before contacting them.

Inside Her Eyes has an awesome sponsor, Aptus Insurance, who has published the “New Parents Personal Finance Guide.” This is a great tool that walks readers through eight financial categories to think about and take action on. Aptus can also give you multiple, competitive life insurance quotes if you need them. If you need a financial planner, ours may be able to help or direct you in the direction of someone local to you. You can reach Andrew through his LinkedIn profile here.

I hope each of us will never have a use for life insurance, disability insurance, or our wills. But chances are good (unfortunately) that we may–so make sure you’re thinking about the future, even though it feels grim to do so. Knowing that Ethan will be be financially taken care of should something happen to either one of us gives Eric and I a little peace of mind.

Disclosure: Aptus Insurance is a financial sponsor of this blog. My opinions have not been influenced by this relationship.