Home » Partners & Parents » Expectant Fathers » Planning for college and other headaches - Page 2

Planning for college and other headaches - Page 2

© Dale Kiefer

If professional child care is in the cards, understand that it's not cheap. And waiting lists, especially for infants, tends to be long. Do your homework now, and sign up for a spot, if you haven't already. Depending on the quality of the day care, its geographic location, amenities such as educational programs-and pure luck-you can expect to pay a significant amount for full time child care. Draft a household budget now that accounts for the additional expense. According to Quinn, working parents pay anywhere from 10 to 20 percent of their income toward child care.

If your company offers a flexible benefits plan allowing you to contribute part of your pretax salary toward child care expenses, take full advantage of it. You'll save money that would otherwise go into your uncle's pocket. Uncle Sam, that is. If you're not so lucky, remember to use the child-care credit on you income tax return.

Now is also a good time to purchase additional life insurance, or at least review your current coverage; a child means added family expenses. Write or update your will. Your child-and his or her inheritance-will need a legal guardian in the unlikely event of the simultaneous death of you and your spouse. It's unpleasant to have to consider such contingencies even before the arrival of your newborn, but once you've taken care of it, you'll both sleep better (at least when your infant isn't crying!)

And finally, begin at least thinking about saving for your child's education. The sooner you begin, the easier it is to amass enough to meet your goal. College tuitions tend to rise far faster than inflation. An aggressive savings and investment plan, started early, is your best bet to meet the challenge of financing a higher education. A professional financial planner can help you explore your options. Most will recommend high-yield mutual funds for the first ten to 15 years of your child's life. Although risks are also higher, long-range investing generally comes out ahead, and a planner will likely recommend shifting some of those assets into safer investments as matriculation approaches.

Finally, don't panic if you can't afford to save as much as you'd like. Few can. But remember that a penny saved can mean two pennies earned over the long term, so save whatever you can. If you're unable to finance your child's education, financial aid is available and there's always the option of work/study. In any event, doing a little homework now can save you headaches later. There's no time like the present, so go ahead and take the plunge.

The copyright of the article Planning for college and other headaches - Page 2 in Expectant Fathers is owned by Dale Kiefer. Permission to republish Planning for college and other headaches - Page 2 in print or online must be granted by the author in writing.