If you have a baby on the way, you’re probably more concerned right now with deciding how you’ll adjust your sleeping patterns to cope with the family member rather than with the financial future of your family. Thankfully, planning for a financially sound future isn’t that hard.
For most average earners, expanding the family is a financial challenge. Though it may sound scary, securing the financial future of your new family needn’t be a painstakingly hard pursuit. All you need, for starters, are baby steps and some minor change to your pre-baby fiscal behavior to get your finances on the right track. In the early months, you need to focus on starting a solid groundwork for meeting your family’s monetary needs for the years ahead.
Know your upcoming expenses. Remember that carefully planned future you planned as a couple? The one with late-night movies and lavish dinner outs? You’ll need to scrape that off your list (or at least make it less).
But hey, you’ll probably be tired of that stuff anyway. The first step towards new family financial planning is to sit down and analyze everything. The most common expenses include:
- Bottles and formula
- Diapers, wipes and ointment
- Breast pump
- Regular doctor visits
- Cribs, high chair, car seat, safety locks and stroller
- Daycare, if both of you go to work.
There are many to add to this list, and you’ll figure them out as you go. Once you’re done with the basics…
Build a larger net. There are expenses like food, diapers, your baby outgrowing his or her car seat, and even retirement. These are easy to plan and pay for. And then are the expenses that creep up behind you, smack you in the head and sneer at your well-laid plans.
Your expenses have grown, and your emergency fund should as well. If you luckily evaded all emergency financial situations, then even better! You can even consider buying your own house if you’re still renting. For instance, Lend Lease has house for sale in Springfield Lakes that you can look into and consider as your family’s next abode. You don’t want to keep renting forever if you can help it, right? You want to set up a good example for your kids anyway.
Update Life Insurance and Wills
These two are equally important when setting up a long-term financial plan. You can look online to buy life insurance and create a will, or you can make an appointment with an attorney or financial advisor.
Keep it simple. After your first son or daughter’s birth, securing the financial future can feel like a frightening task. Take this advice to heart: keep it simple. Get the basics done and paid for and start creating a reasonable plan for your future needs. What’s most important at the moment is this:
- Understand your new budgetary needs
- Set money aside for any emergency situation, a retirement fund and a college fund
- Draft a will
- Buy insurance for you and your spouse
Once you set up your basic financial needs, you can start coming up with new and better ways to get your little bundle of joy to sleep.
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.