Financial Planning for Parents-to-Be
Planning for a baby is exciting and sometimes a little frightening for expectant parents. Along with the joy and fulfillment that a new baby brings, you’ll have new financial responsibilities. Some costs are unavoidable, while others may largely depend on your discretion. Sticking to a financial plan could help you provide wonderful opportunities for your child while keeping your family’s costs under control.
- Preparing for the birth. Paying down debt, creating a new budget, building an emergency fund, setting up automated personal finance software and reviewing the beneficiaries on your accounts should all be on your pre-birth checklist. You might not have the time or energy for these tasks once you’re a parent.
- Review your health insurance policy. Get a clear understanding of your coverage during prenatal care, labor and delivery. Copays, coinsurance, deductibles and maximum out-of-pocket amounts can vary.
- Saving money during the first few years. Ask at the hospital, research online and check with pediatricians for free childcare samples. They may not last long, but having a stockpile of various sample-size products can come in handy. Consumables, such as formula, diapers and wipes, can be bought in bulk at warehouse stores or shipped to you via a subscription from an online retailer. Either option could provide long-term savings compared to buying as you go.
- Discuss childcare options. Some families need the income from two working parents, others can choose to stay at their job or become a full-time parent. Even if you’re unsure of daycare, you may want to sign-up for local centers’ waitlists now because it can take years to get a spot.
- Plan for the worst-case scenario. Now may be the time to prepare or revise a will and consider appointing a guardian. Also, if you don’t have life insurance, this is a good time to start shopping for a policy. If something happens to you, life insurance can help provide financial support for your child in the coming years.
Whether you’re early in the planning process or already expecting, it’s never too early to prepare for the cost of raising a child. After all, a new addition to your family is the best gift and the start of an amazing adventure.