You’re having a baby. Congratulations! But are you financially prepared? If not, don’t worry; this guide will lay out financial planning tips for you expecting parents.
This isn’t just about paying the bills on time. The National Health Service (NHS) states the cost of family finances, childcare, job security and improper financial planning can result in a strain on a couple’s relationship. So proper financial planning is necessary, not just for your child, but for your family’s total wellness. Here’s a handy checklist to use.
Financial Planning for Expecting Parents — Pre-Birth
1. Maternity/Paternity Leave
As soon as you know you’re pregnant, find out if you and/or your spouse have paid leave after having the baby. This information will let you know how many days you’re allowed off from work during the year, if your company offers any flexibility with this, and what kind of financial strain this can put on your family.
2. Health Insurance
Calculate expected medical costs and any other health-related insurance expenses for both you and the child. Health insurance allows your child to be looked after if anything goes wrong, but there are plenty of checkups and vaccinations needed even if your child is perfectly healthy.
If you don’t have the right coverage, now’s the time to figure out what you need and procure it.
“You usually have 30 days after a life event to make changes to certain policies, such as adding a baby to the health insurance plan,” Meghan Rabuse, who runs the site Family Finance Mom tells Parentology. “You will definitely want to make sure to do this.”
3. Write or Update Your Will
This is territory people don’t want to talk about, but it’s essential you write or update your will should anything happen to you.
Appoint a legal guardian for your child and indicate how your finances should be given to the child if you die. This will make sure your financial assets (such as your house) are secure.
4. Build a Budget
The costs ranging from diapers and food to medicine for your baby can be tremendous, so it’s a good idea to plan a family budget now. That may mean you have to cut spending on things like your morning Starbucks in order to pay for diapers later on.
A US News and World Report story showed that Americans pay an average of $2.70 for coffee; over the year this comes out to $985.50. That adds up to a lot of diapers.
5. Start Saving NOW
The US Department of Agriculture indicates the average cost of raising a child in America to the age of 17 is $233,610. Even putting aside a little money every month into a savings account you don’t touch will pay off in the end. It will also set the foundation for good skills you’ll teach your child in the future.
Continue Reading: Post-Birth Financial Needs