Financial Planning When You Get Pregnant
Having a baby is an amazing, terrifying, life-altering event that will shape your future for decades to come. But having a baby can also be very expensive, depending on how much support you have from a spouse and/or family.
For most people, once the baby arrives their lives become completely consumed with caring for their child. This is absolutely normal and perfectly reasonable, but it doesn’t leave much room for big-picture financial planning. This is why it’s a good idea to start preparing for your baby before you welcome him or her into the world.
To help get you financially prepared for when your baby arrives, here are our top tips for new parents-to-be.
1) Creating A Parenting Budget
Your daily budget will change dramatically once your child arrives. While some of your new expenses will be predictable, others will not. Write down what your income and expenses currently are, and then factor in things like diapers, formula, clothes, and toys.
2) Discuss Household Income
After your baby arrives, will one or both parents resume working full time? If both you and your partner are working, you’ll need to have a solution for child care. If one of you will remain home, will there be a loss of household income as a result?
3) Create An Emergency Fund
There is no one-size-fits-all number here, but the typical rule of thumb is three to six months of household expenses saved in an account that you can quickly access. If you know you will be tapping into a current emergency fund to help pay for the baby, then you will need to create a plan to rebuild it.
4) Review Your Insurance Benefits
Take some time to review your life insurance and disability insurance coverage. The goal here is to make sure your family can continue to survive financially if something unexpected were to happen.
5) Start Saving For College
It may sound a tad crazy to start saving for college before your child is born, but if this is something you want to do, there are a number of different ways to save. A financial professional can talk through the options with you and help you set up an account in your child’s name. Also keep in mind that relatives can contribute gifts to these accounts.
Speak With A Financial Planner
If you need help with any or all of the suggestions we’ve provided, consider speaking with a financial planner to help you get started.
At Miles Brown, we have extensive experience helping people at every stage of life plan for what’s next. For a free consultation, please contact us today!
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