The separation process can drain us of every aspect of our being. It’s a very financially draining process too, and when we are attempting to look after our kids during the separation process, partly it can be about giving them the right financial foundation. Here are a few things to consider so you can give them the things they need to thrive despite the current situation.
Establishing Your Financial Baseline
You may find yourself held hostage to the costs of child custody but this is why, rather than feeling like everything is costing too much, you’ve got to establish your financial baseline. You need to understand what comes in and goes out of your accounts.
When we really understand how much we are paying for the essentials, but also the things that we want in life, we will establish that all-important financial baseline that makes all the difference.
Set Up a Second Account ASAP
Looking after our children is partly about ensuring they have that bank account in the first place. Setting up a bank account for your child has never been easier, but it’s amazing how many parents have not set up a bank account for their child.
It should be a little rite of passage, and when they are around 5 or 6, a little bank account with some of their own money can give them an amazing financial lesson in seeing their money grow, but also deciding whether they should spend their own money on toys or invest it.
Is It the Right Time to Invest?
The divorce process means you’ve got to be transparent with your finances. During a divorce, many people find themselves using cryptocurrency to hide their investments, but it’s important to remember that transparency is the most important thing. If you have the money to invest, and you have thought that now is the perfect opportunity to get started, you need to be as clued up as possible.
Investing is one of those things that can be invaluable, especially if you are trying to find ways to recoup your losses during the separation process, but you have to remember that you could easily lose money as well. You should never invest money that you cannot afford to lose. So many people have gone into investing because they are looking for a get-rich-quick scheme. The reality is that investing is a very long-term process. You might be able to get a lot of money further down the line, but there is no such thing as a short-term reward in investing.
Have Long-Term Goals
The best thing you can do is to create goals that last the test of time. We only have a certain amount of money, and therefore we need to be using it wisely. This is why, during the separation process, you have an understanding of goals that you truly care about and are motivated to achieve that will ensure you make smart money decisions.
Long-term goals can be very simple ones, for example having a bank account for your child that you put X amount in every month. You can also give your money purpose through different goals, such as investing. But you can also benefit from a reminder that we don’t get rich overnight. This is why having long-term goals makes a massive difference, not just for you, but for your children.
Don’t Forget Adequate Coverage!
While we accept that we need things like car insurance or home insurance, we also need to insure ourselves! When it comes to investing in our children, we have to invest in ourselves. The problem so many of us have is that we are constantly playing catch-up. This is hardly surprising when you look at the cost of raising a child in the modern day. But the best thing you can do to ensure that you give your children a solid financial start is life insurance and long-term care coverage.
It’s amazing how so few of us don’t think about life insurance because we view it as an extra expense. The fact is that we need to invest in ourselves, much like the old adage of when the mask in the airplane comes down, you should put yours on first before you help others. In a financial sense, we need to be giving ourselves the foundations can’t now which is why my insurance is such a simple yet effective thing.
It’s not an easy thing to go through, but if you are smarting from the separation, you should use this as an opportunity to hit the reset button and give your children the best foundations possible.