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July 31, 2020
Parenthood: Joys and Expenses
Parenthood can be both wonderfully rewarding and frighteningly challenging. Children give gifts only a parent can understand, from sticky-finger hugs to heartfelt pleas to tag along on Saturday morning errands. You raise them with a clear goal that you simultaneously dread—that someday they will be grown, independent and ready to move out on their own, and your work will be complete.
As you raise them to make sure they get a good, strong start in life, one thing is obvious: children are expensive! Fortunately, you can take steps to prepare for the finances of parenthood.
Reassess your budget.
As your family grows, you may need to make changes to your budget. Many living expenses will increase, including grocery, clothing, transportation, healthcare, insurance and housing costs. You will probably also need to account for new expenses that come along with parenthood, such as childcare, or adjust your budget to account for a decrease in your income, if you decide to become a stay-at-home parent. Your budget may also need to expand to include new financial goals, such as saving for college or buying a home.
Review your life insurance coverage.
Life insurance is an effective way to protect your family from the uncertainty of premature death. It can help assure that money will be on hand to replace your income and help your family maintain their standard of living. With life insurance, you can select an amount that will help your family meet living expenses, pay the mortgage and even provide a college fund for your children. Keep in mind that the cost and availability of life insurance will depend on factors such as age, health and the type of insurance purchased.
Start building a college fund early.
According to the College Board, for the 2018/2019 school year, the average total cost of one year at a four-year public college is $25,890 (for in-state students), while the average cost for one year at a four-year private college is $52,500. That cost really adds up for a four-year degree!
College costs may seem daunting, especially if you’re still paying off your own college loans, but you have about 18 years before your newborn will be a college freshman. By starting today, you can help your children become debt-free college grads. The secret is to save a little each month, take advantage of compound interest and have a sum waiting for you when your child is ready for college.
The following chart shows how much money might be available for college when your child turns 18, if you save a certain amount each month.
Child’s Age Now $100/month $200/month $300/month $400/month Newborn $38,735 $77,471 $116,208 $154,941 4 $26,231 $52,462 $78,693 $104,924 8 $16,388 $32,776 $49,164 $65,552 10 $12,283 $24,566 $36,849 $49,132 14 $5,410 $10,820 $16,230 $21,640 16 $2,543 $5,086 $7,629 $10,172
Table assumes an after-tax return of 6%, compounded monthly. This is a hypothetical example and is not intended to reflect the actual performance of any investment. All investing involves risk, including the possible loss of principal, and there can be no guarantee that any investment strategy will be successful.
Prioritize saving for retirement.
Many well-intentioned parents put saving for retirement on hold while they save for their children’s college education. But if you do so, you’re potentially sacrificing your own financial well-being. Although you’re focused on the finances of parenthood, if you postpone saving for retirement, you might miss out on years of tax-deferred growth, and it may be hard to catch up later.
Ideally, you’ll want to save regularly for both goals. but if you have limited funds, prioritize saving for retirement. Your child may receive financial aid to pay for college, but there’s no such option for your retirement.
Questions? Contact a CFS Financial Advisor.
Grow has contracted with CUSO Financial Services, L.P. (CFS) to provide investment services, and your CFS Financial Advisor will help you build a plan that meets your needs. The advisor will look at your current spending, saving and investing, learn about your goals and priorities, make objective recommendations and support your efforts moving forward through the implementation and management of your plan.
Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. The Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members. For specific tax advice, please consult a qualified tax professional.
Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2020.
How to Find Your Routing & Account Numbers
When you make a payment online, by phone or on a mobile device, you may be asked for our routing number and your checking account number. Credit unions and banks use these numbers to identify accounts and make sure money gets where it’s supposed to be. You’ll also need to provide your routing and checking account numbers for:
- Direct deposits
- Electronic checks
- Military allotments
- Wire transfers
Where to Find Your Routing & Checking Account Numbers
Your personal checks include both our routing number and your account number, as shown on the Grow check example below.
Don’t have a Grow check? No worries.
Visit any Grow store and ask for a Direct Deposit Form. It lists both your routing number and checking account number.
Making a Loan Payment
When it comes to making payments, we try to make it as painless as possible to pay your loan every month. We have several different ways to pay, including convenient online options.
You have two ways to pay online by transferring funds from another bank or credit union.
- Grow Online Banking (Preferred payment method for any loan)
This is the simplest way to pay your loan. You can make one-time payments or set up automatic recurring payments in Grow Online Banking. Once you log in, select “Transfer/Payments” from the menu. If you’re not enrolled in Grow Online Banking yet, you can set up your account in just a few minutes.
- Debit Card or ACH (Available for auto, personal and home equity loans and HELOCs)
Note: ACH and debit card payments are not available for credit cards or most mortgages, except HELOCs.
We accept ACH payments with no additional fees or Mastercard® and Visa® debit cards with a convenience fee of $4.95. To get started with an online ACH or debit card payment, select Pay Now below.
Pay by Mail
You can also pay any Grow loan by check through the mail. Please remember to include your account number and Grow loan number on the check. (For credit card payments, please do not write your 16-digit credit card number on the check, which can cause a delay in processing the payment.)
Address for auto, credit card and personal loan payments:
Grow Financial Federal Credit Union
P.O. Box 75466
Chicago, IL 60675-5466
Address for mortgage and home equity payments:
Grow Financial Federal Credit Union
P.O. Box 11733
Newark, NJ 07101-4733