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Financial Planning Missteps

Brian Hagiwara

Slip Up: Putting the kids first

Hear us out on this one. Options abound for paying for college (finaid.org is a great first stop, whether you've got a tween or a tot), but there's no such thing as a scholarship for retirement. So you've got to set yourself up before worrying about the children (who probably don't want you moving in with them 30 years from now). Many of us missed that memo.

Solution: Stash 15 percent of your annual income in a 401(k) or an IRA first. See where you stand—and how far you need to go—with the retirement calculators at choosetosave.org. Seem daunting? At a discount brokerage like Scottrade, there's no minimum to start an IRA and you can have just $50 transferred in each month.

Slip Up:  Not thinking about the unthinkable

Estate planning isn't just for the 1 percent. If you don't have a will (and a whopping 65 percent of us don't, studies show), and you and your spouse pass away, a judge decides who will raise your children—and how they'll receive your assets. Scary stuff.

Solution: Get a will and a trust. That way, you designate not only who cares for your kids but how your money gets used, says Lisa Cukier, a partner at Burns & Levinson LLP, in Boston (burnslev.com). Get informed at legalzoom.com (where you can prep documents yourself), and ask friends to recommend a lawyer.

Slip Up: Sweating the small stuff, skipping the big stuff

Plenty of parents obsessed with pocketing pennies will write the same big checks without a second thought: mortgage, insurance, cable. Those aren't exactly negotiable, right?

Solution: Commit to giving big-budget items a second look. If you don't know where your paycheck goes (don't feel bad—plenty of us don't, financial experts say), start with a budgeting tool (check out some options below). Then see where you can winnow: If you haven't refinanced your mortgage, rates remain low (get started atbankrate.com). Shop around for insurance—insweb.com and insure.com provide easy comparisons. And, yes, ask for discounts. My husband called Verizon about our plan and they gave him $15 off per month for six months, just for calling. He saved $90 in ten minutes. It would take a Sunday afternoon of coupon clipping to equal that.

Follow Your Money

These sites (with apps) can help you manage the family budget:

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