OK, the first need is life insurance on each of you. At your ages, and in good health and non-smokers, you could EACH (and each of you needs it) get a large policy for a total of $50/month. To find out how much it would cost each of you monthly for a $500,000 20-year level-term policy) go to www.Accuquote.com or call them at 800-442-9899. Levelterm means the premium will stay the same for all 20 years of coverage. By that time, your child will e through college and you will have Social Security.
Life insurance means there will be money in an emergency for your child. Next is retirement savings since that type of lever term insurance does not build savings. It’s fabulous that you don’t have credit card debt. That puts you way ahead of the game.
But I think you need help going through your budget to find an extra $100/month AFTER life insurance payments to set up an Individual Retirement Account. And I’m betting there are ways to cut costs — or earn more — to find that money! Call the National Foundation for Credit Counseling at 800-388-2227. You can talkto them over the phone and they will help you figure it out. OR get The Budget Kit on Amazon — it’s by Judy Lawrence and is really helpful showing you where the money is going and how it can be changed/adjusted to provide for an automatic savings plan.
Just like life insurance – each of you needs an IRA — that’s why they call it an INDIVIDUAL Retirement Account! And it only works if you sign up for an automatic deduction from your checking account, so the money is taken out before you see it and spend it!
When you find that money in your budget, please write back and I’ll give you specific instructions on investing that money for your retirement.