I came across recently and it got me thinking about the question on several levels.
First, what would I do with my money in that situation? This was the aspect that Grad Money focused on. For me, I’d do everything I could to set things up so that my son and daughter would have every opportunity that life afforded them, and then I’d spend the year with both of them and with my wife, doing as much as I could to enjoy every second with them. My son might be old enough that he could hold onto a fragmented memory or two of me as he grew older, and that would be enough for me.
That’s nice and pleasant and everything, but why is the question important at all? That’s where things get interesting…
First, the answer to that question indicates what you really value in your every day life. For me, it’s clearly my family – nothing else comes close than the joy I have just having a conversation with my wife or rolling a ball back and forth with my son or writing in my daughter-to-be’s baby book or reading a book to my son or making dinner for my family. Those are my key values in life – those are the things I really love more than anything else.
From there, those values indicate what I should be doing with my money. What can I do with my money to make those things that I value as good as possible? Right now, we’re shopping for a house with the idea of family above all – for me, this means a big family room, a good-sized kitchen, and several bedrooms. I’m putting money into a 529 for my son and have filed the paperwork to open one for my daughter four months before she is born.
My savings and financial planning also revolve around this idea. The emotional and material needs of my son are very simple right now, but they won’t always be that way, so for now I am socking away a tremendous amount of money so that when he grows older, we have the money to be able to support great opportunities for him. For example, I’m going to encourage him to spend a year or two out of school doing something that’s either about self-exploration or a volunteer project of some sort, and I hope to be able to fully support the endeavor (of course, when he goes to college, that’s a different story).
It also indicates how I should be handling my estate planning. My wife is a stable, functional person, and we’ve discussed what would happen if I were to suddenly pass away, or if we both were to go away. We carefully selected guardians for our children and have the mechanisms for a trust in place for our son – and we’ll alter things to put a trust in place for our daughter, too, when she is born.
I encourage you to spend some time today really thinking about the answer to that question in your own life, and then see whether or not the answer to that question can point you in some directions for your own financial planning.