The idea of growing your family is exciting! There are so many new experiences that are just around the corner. But with a growing family comes growing financial responsibilities.
Did you know the average family spends up to $12,000 on expenses related to their child just in the first year of life? Preparing for a baby begins as soon as you find out you’re pregnant. Planning now will help you enjoy all the excitement that lies ahead.
1. Update Your Budget
No matter your financial situation, adding another human being into the picture will get expensive. Consider immediately updating your current budget as soon as you discover you’re pregnant and begin planning for the large upcoming expenses.
Cut back on unnecessary spending and splurges so you can invest in the life to come. Like it or not, your spending will increase as soon as the baby arrives, but preparing ahead of time allows you to stay ahead of the impending expenses.
2. Consider What You Need… and What You Don’t
There are a lot of things a baby and you as parents will need throughout pregnancy and after birth. It’s easy to get overwhelmed with the number of things on the market today and fill up your shopping cart prior to weighing the pros and cons.
While you shouldn’t rely on baby registries to get you everything you’ll need, make sure to do your research before purchasing. There are many second-hand stores that have quality baby items while helping you save some cash!
3. Purchase Life Insurance
Buying life insurance is great for financial planning and also ensures that your family will be taken care of should something happen to you. You can also take this time to review your current policy and update it as needed.
It’s difficult to think about something that might not happen, but it’s better to prepare in the case that it does. Be comfortable with the plan you put in place, knowing you can adjust it later down the road.
4. Educate Yourself on a 529 Educational Savings Plan
It may seem like it’s way down the road, but it’s important to begin investing in your child’s future now. A 529 is an account that allows you to invest money into it for any qualified education expenses in the future. The sooner you begin investing, the more potential this account has to grow for when your child is ready to use it.
5. Review Your Health Insurance
Whether you’re covered through your job or purchasing insurance on your own, it’s important to educate yourself on your current health insurance policy. While many expenses might be covered, there could be out of pocket expenses that you’ll need to prepare for prior to the birth. Knowing ahead of time will allow you to set that money aside without dipping into your savings.
Preparing for a Baby Doesn’t Have to Be Stressful
While you can’t plan for everything in life, you can plan to be surprised. Preparing for a baby comes with joys and excitement, but it also comes with unexpected expenses. Taking time while you have it to prepare financially will ensure that your baby and you as a parent will be well taken care of.
Learn more about what you can do now to protect your family’s financial future. Planning ahead might sound like a lot of work, but you’ll reap the benefits later of what you sow now!
Applications for life insurance are subject to underwriting. No insurance coverage exists unless a policy is issued and the required premium to put it in force is paid. Guarantees are based on the claims-paying ability of the issuing life insurance carrier.
This article is for informational purposes only. Please be advised that this article is not intended as legal or tax advice. Accordingly, any tax information provided in this document is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. The tax information was written to support the promotion or marketing of the transaction(s) or matter(s) addressed and you should seek advice based on your particular circumstances from an independent tax advisor. PPG-139592 (9/19)(Exp. 9/20)