Becoming a first-time parent is a life-changing moment indeed. As happy and as joyous as the occasion is, there are a few important financial considerations that every parent should pay attention to so that you can give your little one undivided without having anything hanging over your shoulder. This is one of several great pieces of content you can find on the Stroller Trotter blog.
Make sure your new arrival is covered under your health insurance
Babies can get sick unexpectedly, as their immune systems are fragile after birth. Therefore, one of the first things you'll need to do after the baby is born is getting in contact with your health insurance provider to request that they be added to your health policy.
Put your roots down
Suppose you've decided that now is the time to put your roots down, and you've decided to purchase a home for your growing family. Then you may need to consider the type of down payment you're willing to put down. For example, an FHA loan may require you to put down as little as 3.5% as a down payment, whereas a conventional loan may require you to put down as much as 20%. Here, it's about exploring your options and deciding what works best for you and your budget.
Get life insurance (if you don't already have one)
Life is uncertain and can change drastically from one day to the next. Furthermore, when you become a parent, your priorities suddenly shift, and you're left wondering what will happen to them should something happen to you. That's why many new parents opt to take out a life insurance policy to safeguard their children's future - just in case.
Budgeting becomes super important
Along came the baby, and you may find that suddenly your daily expenses have gone through the roof. This can be quite a shock to the system if you didn't anticipate how much caring for your new baby's daily needs would cost. This is where having a clearly defined budget in place becomes very valuable in ensuring you have funds on hand to cater to these basic expenses.
Create a contingency fund
Also known as an emergency fund, this is essentially a separate savings account to cover any unforeseen expenses that you might not have planned for, such as a job loss, exorbitant medical bills, or maintenance or repair costs that come with owning a house or vehicle, for instance.
Prepare for retirement
Life seems to go by in a blur, especially when your children are little and things are beyond busy. As they say, the days are long, but the years are short. That's why it's also vital to start planning for the years ahead so that you can be financially independent in your senior years.
Saving for college tuition
It's never too early to start putting away for your child's college tuition, as tertiary bills can run into thousands of dollars depending on what they choose to study. Therefore, putting away money into a 529 plan is a great way to start building up funds for when that day happens. Plus, the benefits of starting a 529 plan early means you get to save up funds that are tax-free.
Finding ways to earn an additional income
Perhaps you've realized that you need to have multiple revenue streams to live comfortably and ensure you have those extra funds to put away for a rainy day. If you are thinking of starting a business, an LLC is a great option if you want a business structure with excellent tax benefits. Be sure to find out what the filing requirements are in your state, as these may differ from place to place. If you'd prefer not to do the filing work yourself because you have a newborn to take care of, a formation service can take over this task from you and save you quite a bit of money in the process.
In summary, planning financially for a child doesn't only mean catering to those expenses involved in raising a child. It also means saving for future expenses too so that your family is well provided for the days to come.
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