Adding to the Family: Financial Planning Tips for New Parents
Congratulations on the exciting decision to expand your family! As you prepare for this beautiful journey, remember that with the joy comes some necessary financial planning and prioritizing.
Adding a child to your family means more than just a pet’s level of commitment and expenses. It can be quite stressful without proper planning. Your financial priorities will shift, and different considerations will emerge, such as college savings, life insurance, and having a robust emergency fund. Taking time to evaluate your family’s finances can help ease the worries that come with a new baby.
Here are some financial planning tips that new parents should consider:
Build an Emergency Fund. If you don’t have one, start building an emergency fund. If you already have one, add to it. With a growing family, unexpected expenses are more likely. Aim to save at least 3-6 months’ worth of your take-home pay. If that seems daunting, start by saving 10% of each paycheck. Setting up a payroll deduction can automate this process and add the money directly into your savings account.
Create a Baby-Centric Budget. Develop a budget that accounts for all your current expenses and includes new costs like health insurance, doctor visit copays, diapers, formula, daycare, and other necessities. Do your research to estimate these expenses and discuss upcoming changes with your employer.
Start Saving for Education. It’s never too early to save for your child’s education. The earlier you begin, the less impact it will have on your regular budget. Talk to a financial advisor at Scott Credit Union for guidance.
As you save for your child’s education, remember to continue saving for your own financial future, including retirement, to maintain a balanced and secure financial plan.
Review Life Insurance. Speak with a financial advisor about life insurance options and ensure your accounts are properly set up. Name beneficiaries on your accounts, and consider the implications of any loans you have if something happens to you. Setting up a will may also be a wise decision, involving consultation with a legal professional.
Becoming a parent is an exciting journey that involves taking care of your loved ones both now and in the future. Parenthood brings a mix of emotions, and while it may be daunting, thoughtful financial planning can significantly ease the process. If you’re ready to open a savings account, Scott Credit Union offers great rates with no monthly fees. Learn more online or talk to a financial professional at your local branch.