In addition to working out baby names, another consideration is ensuring you have provision for this little one having a safe financial passage while under your care.
Meet Klaus and Cindy and 2yearold Jasper and surprise baby due in 3 months. Klaus and Cindy are renting. Klaus is a self-employed landscaper and Cindy works part time hours until she takes maternity for 6 months when surprise baby arrives. Klaus and Cindy are hoping to buy a house in a few years once they have saved enough and the business has good history for the lenders to view. They know where they want their children to go to school and have enrolled them for Prep. They have read how to be a barefoot investor and have bucket bank accounts and industry fund super. A few red flags that are waving for these guys is the money in the Bucket account has no asset protection from creditors should an unforeseen event hit Klaus’s business. Klaus’s income is super important to this family unit; they would be in financial hardship if Klaus couldn’t work beyond 2 months with their current savings and lost income from Klaus. Klaus too would not only be beside himself if something happened to Cindy. The costs of getting help around the house and with the children in extra care; all without Cindy’s income, has the potential to squash the dream of owning his own home for some time.
We revised their insurances to be tax effective and suitable to their needs and to cover the kids under a parent policy. If their children have a serious illness that is covered, they would receive a lump sum paid to allow them to take time off work to care for their child. We also restructured the savings to be invested in an asset protected investment that can be used for buying a home or in an emergency. We had their super well invested to meet their needs. Then we set up super contributions to Klaus’s so his future self can say thank you and his current self reduces his tax position. Plus we covered estate planning with Super and insurances so they would have funds move quickly as per their wishes. Winning all round.
This family went from generic information to tailored advice that has them looking super sharp!
