5 Financial Decisions Parents Need to Stop Procrastinating On

I counted.

Our family has lost five family members and friends unexpectedly in the past decade. These aren’t just people we heard of or knew online, these were dear friends we grew up with, went to college with, and were related to.

Heart conditions, rare cancers, tragic accidents. It takes my breath away to recall each of their stories — their lives cut much too short. And, in the wake of their death, they left families. Husbands, wives, and children. It’s sobering to be on the sidelines of this immense grief. My husband and I never thought we would attend so many funerals of our peers.

It’s commonplace to grieve for a season and move on. Although we care deeply for these people, their loss isn’t part of our daily life. Being close to loss has, however, spurred my husband and I to be proactive in a number of financial decisions.

Below you’ll find five financial decisions we finally stopped procrastinating on. I hope our efforts will spur you to address each of these things too. These really are nonnegotiable if you have children, and you’ll feel so much better once they’ve been taken care of.

Purchase life insurance

In my opinion this is the #1 nonnegotiable. If you have to give up coffee or organic berries or your Netflix subscription, do it. Get something. Anything is better than nothing. After much counsel and research, we went with term life insurance that equated to 10x our family’s income.

Activate a living will

What happens to your kids if their parents pass? Your only opportunity to determine that is when you’re still alive. Otherwise, your remaining loved ones will be put in the difficult position of trying to determine what you want done. With a living will, you can have all the details written down in a clear and concise manner to make sure your minor children are taken care of after you are gone.

Eliminate debt

Once your post-life decisions are squared away, it’s time to get your current finances in order. Start by eliminating debt. Your discretionary income is your most effective wealth building tool, and when you are strapped with debt, it eats up too much — or all — of your income. Drive cars you can afford by paying cash for them, and fund your entertainment with cash so you don’t overspend by charging on a credit card that you will pay off “some day.”

Get your savings on

Too many families are derailed by small “emergencies” that aren’t true emergencies because they have no margin in their income-to-expenses ratio – your car needs new brakes, the kids’ sports fees are higher this year, someone needs a minor medical procedure, and the like. None of these things are fun, but they are pretty expected. Cars need repairs. Activities cost money. Teeth need to be pulled, and kids break bones. Most experts recommend that you have a minimum of three months’ worth of expenses saved. So, average your monthly expenses and multiply by three and consider that your savings goal.

Create a legacy binder

Here’s one to-do that doesn’t actually cost a dime. Well, it will cost you $5 for a binder and dividers, but that’s it. We call it a “legacy binder,” but you can call it whatever you like. Essentially, it’s just a binder full of important financial information. Our legacy binder includes account and login information, a copy of our legal documents, life insurance details, letters I’ve written to our kids in case we are suddenly gone, funeral instructions, and our monthly budget that shows frequent bills, subscriptions, and other payees.

It’s time-consuming to put together, and we are actually due for our annual review to make sure ours is up to date. But in the case of a tragedy, it is a worthwhile gift to those we leave behind. A legacy binder will make the logistics of our death — untimely or not — as easy as possible.

These are not fun tasks

They are not what-ifs any parent likes to mull over. But for the sake of our kids and those who would be left to care for them in our absence, they have become a huge priority.

The initial task is the most daunting. Divide and conquer. Go at it methodically while still maintaining a sense of urgency. Give yourself deadlines if you must. But get it done. Now.