Baseball As Life? Second Base

Last time I wrote about getting to financial first base. The next stage, getting to second base, involves things such as supporting a family, buying a home, beginning to save for retirement, paying off outstanding debt (based on the plan set up at first base) and putting asset protection in place.
Buying a home brings a new element of debt.  However, this is not “bad” debt if it is handled correctly, i.e. buying what you can truly afford. Get adequate homeowner’s insurance coverage for replacement of the structure and possessions. Or, if you are a renter, buy a renter’s insurance policy.

Saving for retirement should begin in this stage if it has not already.  Take advantage of employer-sponsored retirement savings plans. If your employer offers any type of matching, do what is necessary to get the whole match if at all possible.  Alternatively, look into a traditional IRA or a Roth IRA or perhaps your own personal or small-business retirement plan.
Very likely you may have to weigh saving for retirement against saving for your child’s college education. Err on the side of saving for your own retirement. You won’t be able to borrow to fund retirement, and your children may not be able to support you later.
For those saving for college give consideration to a 529 plan. In Georgia contributing to a 529 plan also brings the potential benefit of a tax deduction for all or part of the contribution.

Finally, proper asset protection is essential if you have dependents and/or substantial assets. Have a written will to define what happens with your belongings when you are gone, including defining guardians for minor dependents. If you do not have employer provided disability insurance, add a personal disability insurance policy. Make financial provision for surviving dependents through term life insurance.
As you move on to third base, expect more life changes.

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