Finance Tips for New Families
If you’ve just started your new family, you’re probably way more concerned about getting a full night’s sleep then the financial situation of your new life. You will eventually get to sleep soundly, but your financial future is something you have to take into consideration sooner rather than later.
Expanding your family can be a challenge for those who only make average wages. It’s estimated that raising a child from the time they’re born to the time they turn 18 years old can cost over $200,000. You can plan on spending about the same amount to help them get through college.
That figure is a daunting number to look at. While it may seem off-putting, it’s completely possible to secure a stable financial future for your family. Follow these tips to get your new family on the road to financial security.
Know Your New Expenses
When you and your partner became committed to each other, you probably set up a budget that covered all of your needs as a couple. The extra bit of disposable income that you two have set aside, while great for dinner and movie dates, won’t be enough to cover the extra bit of cash you’ll need for your new family.
You want to sit down and analyze what expenses you had as a couple and what new ones you’ve taken on by starting a family. When you get the chance, probably when your little one is napping, you should figure out what those new expenses are. Some common one often includes:
- Formula and bottles
- Wipes, diapers, and ointment
- Breast pump
- Regular doctor visits
- Safety locks, stroller, car seat, crib, and high chair
You’ll have other expenses later down the road, but you’ll figure them out as your child gets older. Just work out the costs for the next couple of years when figuring out your budget right when your baby is born.
Think College but Not Too Much
The biggest worry that parents have for the long-term is almost always the same: college.
You want to start thinking about it early because, when you start saving early, the cheaper college will seem when they go. While they still might need financial help when the time comes, they’ll need fewer loans, scholarships, and grants.
You can start saving by making investments, starting saving plans, and buying bonds that are designed specifically for tuition purposes. Flexibility varies with the plans that you choose, so you want to do your research on what you can and can’t use your savings on.
While your child’s education is extremely important, you want to look out for your future as well. Set up a balance in saving for your child’s college fund and your retirement fund.
Update Life Insurance and Wills
While it may be unpleasant to think of when you won’t be around, it’s necessary for determining your family’s overall security. You’ve probably already talked about it with your significant other when you committed to each other, but the new addition to your family requires you to reevaluate those plans. You need to put your child into your will and, perhaps, increase your life insurance.
For those who haven’t done any of these steps, the birth of your new child will put these considerations at the top of the list. If you don’t, the results of a death in the family will be designated by the government. The financial loss can really negatively affect your family, leaving them unable to cover the costs of such things like higher education or mortgage.
You can easily draft a will or buy life insurance from the comfort of your home, or you can make an appointment with a financial advisor or lawyer if you prefer. They’ll be able to give you the advice that you need based on your situation.
The Bottom Line
You won’t have all of the knowledge or resources that you need before or when you give birth. But with a little help and some preparation on your part, you’ll be ready. Remember—keep things simple. You don’t need a back plan for absolutely everything.
You always want a solid plan for the future, and it would unfortunate if your past financial mistakes came up while you’re trying to set up your family. Luckily, there are resources available to help you with dealing with financial problems in your past. You can see the steps that you can take to assist in your family’s financial journey at https://aaacreditguide.com/get-out-of-chexsystems/.