Welcoming a new baby into the world is life-changing, without a doubt. other than absence of rest, this new member of the family comes with a lengthy list of responsibilities — and tremendous monetary duty.
Upon the announcement of a new baby, three classes of expenses are immediately triggered: medical costs associated with the pregnancy and delivery; possible costs from taking time off after the birth or reducing your work capacity; and most important, of course, the costs of rearing your new arrival.
Create a checklist of key financial considerations you need to address before the arrival of the baby
At a minimum this should be considered in the list
- What child care support is within your budget
- Would either you or your partner take a time off after delivery and what would be the impact on your revenue (budget).
- How you’ll pay for prenatal and delivery costs. It’s important to double-check your insurance coverage and associated benefits to determine how much you’ll be paying out-of-pocket.
- Consider minor costs like clothing, toys, food, diapers because they might not cost much but the in long run they will cost a whole lot much.
- Procuring insurance coverage for your new child.
Additional costs to consider upon baby arrival
Once baby arrives, you’ll likely feel a shift in your money mentality, as the reality of your child’s future needs set in. Now is the time to start doing some financial planning. For instance:
• Update your beneficiaries on all your accounts. And if you don’t yet have a will, create one. It’s also time to think about an executor of your will and who would handle Junior’s needs if you’re not around.
• Consider additional financial products. If you don’t yet have life insurance, get some STAT. Remember, it’s not just about you anymore. Disability insurance should also be a strong consideration so that you’re able to provide for baby without disruption.
• Investigate 529 plans or other college savings vehicles. The sooner you begin saving for college, the more time the account has to grow and enjoy capital gains.
Finally, use this shift toward more responsible and careful financial planning to really alter your overall money mindset. A child can be just the motivator you need to make better financial choices in every area of your life, in order to really treasure what matters most: family.