My husband and I have no debt. We are in our mid-twenties, we also have a full emergency fund, and we each have 401(k) plans with our employers.
Currently, we are interested in life insurance. We are not planning on having children, so what duration policies would you suggest for a couple in our situation?
I recommend the two of you find good 15 or 20 year term insurance policies, with coverage amounts of 10 to 12 times your individual earnings. If you change your mind and decide you want kids later, I recommend converting them to term 30 policies, still at 10 to 12 times your earnings. Why? You want the insurance to be there to protect all family members until the children are alone.
By then, and in the years that follow, your continued saving and wealth building will lead you to a place where you will be self-insured. And it’s a great place to be!
Use the commission, not the allowance
What is the right age to start paying child benefit?
In my mind, there is never a good time to give an allowance to children. Instead, make a plan to pay them commissions and assign them age-appropriate weekly tasks.
This can be done with very simple tasks from an early age. When the work is done, they get paid. If they don’t do the job, guess what? They are not paid. It helps teach them a healthy work ethic and introduces them to the idea that hard work creates money.
The simple act of giving money to children is a sure way to sow the seeds of law in a young mind. You don’t want your kids growing up thinking they deserve money just because they’re alive. Of course, there are also things children should do without being paid. When you are part of a family, everyone must understand that they have a responsibility to participate and help sometimes!
Dave Ramsey is an eight-time national bestselling author, personal finance expert and host of The Ramsey Show, heard by more than 18 million listeners each week. He is CEO of Ramsey Solutions.