Having a child is a huge undertaking. This of course is true on a personal level, and also from a financial standpoint.
There are many steps to take when it comes to making sure you can provide for your child, and in planning for the future of your family. Here are a few.
Make a plan
The first step in financial preparation for a newborn is having a plan.
You’ll want to take an inventory of your finances and make any necessary budget revisions to account for costs related to your new family member. Evaluate employer benefits such as childcare subsidies, college savings plans, or flexible spending accounts.
To get ahead financially, you’ll also want to eliminate any high interest debt like credit cards, and establish a safety net and emergency fund. Experts usually recommend building a safety net of at least three months of living expenses.
Start saving for college
College costs continue to rise. You’ll want to set aside money every month, even if it’s just a small amount, for your child’s education. You’ll also want to look at savings plans that offer tax benefits, such as 529 plans, and pick one that makes sense for your situation.
Check your insurance
You will want to make sure you have the right levels of life, disability, and health insurance coverage in place for your new family. You’ll also want to make sure to update your plans to include your new child.
Update your will
While it may seem early for some, parenthood is a good time to begin establishing or updating a will. This includes reviewing beneficiaries and appointing a guardian for your child or children.
Prepare for leave
Many U.S. companies don’t have the most generous maternity or paternity leave plans. However, most new parents can take 12-weeks of unpaid leave under the Family and Medical Leave Act. This leave is often unpaid so make sure to figure out a way to cover your living costs while out.
Plan for childcare
Childcare costs can eat up a large portion of your income. It’s important to have a solid plan in place for taking care of your child. If you’re doing daycare, spaces can be hard to find, so make sure you’ve developed a solid plan, including a way to pay for it.
If you’re expecting a child, or planning to have one, speak with an expert at John B. Wright Insurance to make sure your insurance will cover your family’s needs.
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