Consider life insurance for your children
It might be a sensitive subject, but you have to think of the positive aspects of such an investment: cash accumulation, explains industry pro, Thomas. “Compound interest works best when you have a lot of cash or a lot of time. Kids have a lot of time”.
“When buying an Indexed Universal Life Insurance policy for a child, the cost is very low and remains the same over the life of the policy, while the cash continues to grow. The parent owns the cash and can borrow from it. The parent can also assign ownership to the adult child one day, along with the cash, just in time for adult things like a down-payment on a home. Or the child can create retirement income with the policy.”
Don’t close out old credit cards
Your credit card history is one of the factors used to evaluate your credit score. “The longer your stable credit history, the better it reflects on your credit score,” explains Diana. “The age of accounts is averaged over all of your credit accounts, so closing an older account that is infrequently used actually harms your credit score in two ways: It lowers your credit limit, which raises your credit utilization; and it lowers your average account age. If you have an old card with a decent credit limit, use it at least annually to keep it open. But don’t forget to pay the bill on time!”
See also Spring Cleaning Your Finances? Here’s What You Should Never Do for more information on closing out credit cards.
