6 Financial Tips For New Parents
Whether your pregnancy was planned or not, seeing those 2 lines on the test strip will change you entire life. Thinking about your future and the financial responsibilities you’ll soon face can trigger anxiety and stress in the most frugal of people.
Once parenthood is impending, it’s important for mom and dad to start thinking about finances and to get their priorities in order. Read on for 6 financial tips for new parents.
Get Life Insurance
If you don’t already have a life insurance policy, get one. Once you have a family, a death could leave behind not just a grieving spouse, but a family that needs financial support.
Get a basic term life insurance policy instead of a permanent life policy to save money. Make sure you get a plan that covers the life of your mortgage and will provide support until at least the kids are out of school.
Check Your Health Insurance
Check your employers leave policies and health coverage. You’ll want to look into maternity leave or paternity leave as soon as possible so you can start planning what will happen once the baby arrives.
Also, find out if the birth will be covered with your health insurance and how much you can expect to pay. Even if you have good insurance it can still cost thousands of dollars to have a baby in a hospital.
Grow Your Emergency Fund
Ideally, you’d already have an emergency fund with enough money in it to cover any bills should you get laid off. If you don’t, now is a good time to start one.
Even if you can’t fund the whole thing before baby arrives, it’s good to have any amount of cash in reserve for unexpected expenses.
Start Thinking About College
Once baby arrives it’s a good time to start a 529 college savings plan. When your kids go off to school you’ll have a nice nest egg of tax-advantages savings that can be used to pay for tuition or other school expenses.
Best of all, other relatives can add to the account and help it grow, making birthdays and holidays a breeze for relatives.
Get Started With Estate Planning
Wills, estates and things like that aren’t just documents that old or elderly individuals need. Unexpected deaths can happen to anyone, so it’s important to have a plan in place that details what you want to happen to your belongings and your children.
Create A Household Budget
Babies are expensive, so there’s no better time to get serious about budgeting. Look at your monthly expenses and find places to tweak the budget to make ends meet. You may be surprised how many monthly services you’re paying for that you really don’t need.