New Parent Financial Tips
By Dylan Gray
You don’t have to look hard to see why having a child radically changes one’s perspective on life. Your personal life, time management, sleep schedule, and financial responsibility toward your family forever change with that one little addition. With that in mind, it’s good to have an understanding of what you can do to prioritize your life and be prepared for anything parenthood throws your way.
Check out the list below of helpful financial tips specifically targeted for new parents:
- Set a Budget – Wandering through baby stores can be a lot of fun, and it’s easy to get swept up in picking out cribs, rockers and cute stuffed animals. But while you obviously want to have all the essentials for your baby, make sure you’re shopping smart. Do you really need the Cadillac of strollers when a less-expensive one works just as well? Could you use “gently used” items instead of buying brand new stuff? Remember, you’re only going to need it for a few months to a year anyway… So there’s no need to go into debt buying that solid walnut nursery ensemble. Set a budget and stick to it.
- Prioritize your Savings – Yes, starting a college savings fund early is vital. But saving for your retirement is important, too. Developing a solid financial plan that lets you put aside money for your kids and yourself is essential. After all, if you hit retirement age, or should become disabled, but don’t have enough saved to live on, who are you going to turn to? So talk to a financial advisor to help you plan now, and have well-balanced financial options down the road.
- Establish a Will – If something were to happen to you or your spouse, what would happen to Junior? Wills aren’t just for the 1%… Anyone with kids should have one drawn up to make sure that your wishes are carried out if anything happens to you.
- Apply for a Social Security Number – Take advantage of your new income tax deduction! A Social Security number is an important document to access many health and human services benefits, and is required to claim your child as a dependent on your income tax return. Your child also may need a number if you plan to open a bank account or buy savings bonds for them, get medical coverage, or apply for government services. You can apply for a Social Security number for your baby when you apply for your baby’s birth certificate. Check out information on the Social Security Administration website now so you can apply as soon as possible.
- Review your employer benefits – What’s your employer’s maternity or paternity leave policy? What length of time are you allowed in order to add your baby to your health insurance and what will it cost? Does your employer offer Life Insurance or dependent childcare benefits for kids? Take a look at your employer benefits before the baby comes so you know what to expect and which benefits need updating.
- Get Life Insurance – When it was just you and your spouse, Life Insurance helped ensure your partner could afford to pay the mortgage and avoid foreclosure or bankruptcy on a single income. Now, with a new baby on the way, you may want to rethink your Life Insurance coverage. If something happened to you, will your spouse be able to afford child-care or save for your child’s college fund? A Life Insurance policy may help you protect your family’s financial future, even if you’re no longer around to do so. In addition to Life Insurance for yourself and your spouse, you may want to consider getting Life Insurance for your little one. Insuring your baby will generally be less expensive in their younger years, and it can help protect their future insurability. You’ll help provide your child with a nest egg of their own that can be used for educational expenses or perhaps to put a down payment on a home in the future.