By learning how to plan your finances with a baby on the way, you’ll feel more prepared for the adjustments that have to be made in your life. Whether you’re a mother or a father, the thought of caring for and protecting new life can sometimes feel overwhelming. Being financially ready can put your mind at ease and allow you to make decisions with confidence.
Seeking Help from Financial Advisors
If you’re having a child after 30 or after 40, you may have a few assets that you’ll want to look at with a financial advisor. You may own property, have funds in a retirement account or have money in insurance accounts. The beneficiaries on these may need to be changed.
A personal finance advisor can help you to strategize in the following areas:
- Health insurance
- Working to pay off credit card debt
- Choosing excellent, affordable child care
- When to start a college fund
- Drawing up a will
As soon as you learn that you’re expecting, you can start budgeting as if your baby is already at the stage where they need diapering and breast milk. This makes the transition easier when you deliver your child. At that point you won’t be getting as much sleep and it will be helpful to have already established a new financial rhythm.
Get into the habit of completing a financial spreadsheet offline or online as you pay off debts. Split expenses and responsibilities related to the baby in a way that makes both parents comfortable. A financial advisor can help with this process and identify expenses that you may not have thought about.
Budgeting for the First Years
There are several programs available to help new parents develop a budget that considers their growing family. If you’re a single parent, it helps to consider the cost of a trustworthy care provider on days when you need extra help. Even if you don’t think you’ll need it, include something in your budget just in case. In months where you don’t use it, the money can go into your emergency fund.
Consider joining support groups which are focused on finances and other challenges for new parents. If you feel overwhelmed because you can’t prepare for your child as you would want, talk to someone you trust. While everything discussed in this article will help you to prepare, your child doesn’t always need the newest clothes or brand-name organic soap. Focus on staying healthy, loving your child and raising them with a strong sense of their worth.
To make the most of your financial planning within your family, you’ll need to track your expenses and ensure that you’re sticking to your financial budget. If you already have a child, you may give them pocket money and need to track their use of the funds. These spending apps which are specifically designed for parents help with every aspect of a young family’s financial planning:
- HomeBudget with Family Sync
A finance tracker app can be used to help you plan for your hospital stay when your child is to be delivered. If you wish to have a doula, this cost should be included in your planning. Some women find it helpful to budget for the cost of an epidural, even if they hope they won’t need it.
Planning for Maternity/Paternity Leave
Paternity leave is not offered in all countries or by all companies but it should be. Mothers who are in work situations where they are considered independent contractors may not receive maternity leave. Until legislation fully protects the rights of moms and dads, individuals must plan adequately to protect themselves.
Speak with your financial advisor about planning your leave and protecting your income. Only companies that employ 50 or more people are required by the FMLA to give up to 12 weeks of paternity leave.
You may consider taking unpaid leave if you can afford it. Some moms or dads own a business or have a source of income that allows them a bit of flexibility. If you start planning for maternity and paternity leave early, you’ll be able to save for it, so you can bond with your child and support your partner.
Several insurance companies require you to inform them when you have a child. You often have to do so within 30 days of their birthday. If you don’t inform them, you may not be able to access some of the insurance benefits.
When you make a budget for pregnancy and delivery costs, your costs may be lower due to health insurance. Without insurance, the cost of your hospital stay, medication and any surgery required will be higher.
If you don’t have health insurance, it’s important to think about finding an affordable policy. Children are active bundles of joy. Most parents have worried over their child with a fever or after they got injured during regular childhood play. Your child may need glasses or have asthma. Insurance can help you with health costs even while they’re partially sheltered from the world in the womb.
Life insurance helps you to protect and provide for your family. If you’re a single parent, life insurance gives you the confidence you need that your child will be taken care of financially if something happens to you.
Your Emergency Fund
You probably already have an emergency fund to deal with unexpected events but when you add a child to your family, you’re going to need to have more money put aside. Don’t rely on insurance to cover any emergencies. Ensure that you have a private stash that you can quickly access in the middle of a nighttime emergency.
Initially, you’ll have a savings goal based on estimates. If you use a spending tracker app, you’ll receive information that you can use to adjust that goal if you need to. The best finance apps, such as Mint, make it easy to check on the growth of your emergency fund. Parents want to be as prepared as possible and with adequate planning, you can focus more on bonding with your newborn.