When a baby is expected everything tends to go topsy-turvy for a while. To avoid the chaos that this can bring, you should make use of our tips for planning your finances and future with the new addition to your family. A new baby is a blessing and an adventure but his or her appearance will influence your finances a lot. So, if you are planning to start a family or extend your family, have a look at our tips.
Do some research on the costs of raising a baby. You will find many online resources that give you estimates for diaper costs for the years they will be necessary, the cost of formula and other supplies, etc. Your experience will very likely not mirror those estimates but it gives you a starting point. Ask your family and friends about their financial experiences when a new baby arrived.
Draw up a new budget. When you have an idea of what costs you will need to add you can draw up a tentative budget with those costs included. You should actually have two budgets when planning for a baby. The first budget should include extra savings for hospital costs or unforeseen events as well as funds allocated to buying things like a crib and baby products. The second budget should be the one planning for when the baby is here. You will need to change some allocations and add new areas for spending. Don’t take away from your retirement fund. You will likely want to start saving for college, but that can actually wait a year or two.
Change your will and indicate a guardian. Your will should reflect your new bundle of joy as a beneficiary and you should indicate any specific savings or funds that apply to him or her. You should also indicate who will be the guardian if something happened to you. This may not seem all that financial, but it is a very important part of planning for the future.
Start an emergency fund if you don’t have one. If you didn’t have an emergency fund before the baby’s arrival you need to start one immediately. Unexpected things happen and your baby may get sick and require medical treatment that insurance doesn’t cover. You may need extra funds for babysitters. The point is that an emergency fund is a necessity once you have children in the house.
Add your baby to your insurance. Within the first month after your baby arrives you should update your health insurance to include him or her. They should be on there to make sure that the insurance can pay for all or part of the check-ups that are ahead and any illnesses and treatments.
A baby changes everything. It is exciting to have a little one but you need to plan ahead way into the future to make sure that you can give that baby everything you want to. So, start planning early and get things in place before he or she arrives.