Summary
Every parent-to-be knows that welcoming a child into the world comes with both joy and new financial responsibilities. As a member-owned financial institution, we've supported numerous families in navigating these monetary waters, ensuring that they're well-prepared for their little one's arrival.From setting up the nursery to understanding the long-term expenses of raising a child, the list is long, and the anxiety is real. Don't worry; we've got you covered with contemporary and actionable financial tips to ensure you're well-prepared.
Before Your Bundle of Joy Arrives
Conduct a Financial Health Check
Before diving into baby-specific costs, get a clear snapshot of your current financial situation. Understand your assets like cash, savings, investments, and property. Also be sure to note your liabilities including loans, taxes, and other financial commitments.
Understand Parental Leave Benefits
Given the evolving nature of workplace benefits, assess your employer's maternity/paternity policies. Remember, you might not earn at your regular rate during this period. Anticipate any income reductions and adjust your savings plan accordingly.
Master Your Insurance Coverage
Familiarize yourself with your health insurance, especially around maternity benefits. Understand aspects like co-pays, deductibles, coverage for various types of births, and postnatal checkups.
Draft a Baby Budget
Bringing up a child comes with significant costs. A recent analysis by the Brookings Institution, based on U.S. Agriculture Department data, estimates the total cost from birth to 18 years to be approximately $310,605, averaging around $17,000 annually. Factor in one-time expenses like nursery furniture, baby gear, and maternity essentials.
First 30 Days Post Birth
Document Formalities
Ensure timely application for your child's birth certificate and Social Security card. Most future financial processes will require these documents.
Update Your Health Insurance
Proactively add your newborn to your health insurance policy, keeping in mind that many providers have a 30-day window for this.
Contemplate Child Life Insurance
While not suitable for everyone, it's worth exploring life insurance options for your child. Consult a financial advisor to understand the benefits and implications.
Plan for Childcare
If you're returning to work post-maternity, start researching childcare options. The cost varies significantly, so factor this into your ongoing budget.
Planning for the Future
Update or Draft a Will
Safeguard your child's future by either creating a will or revising your existing one. Clearly define guardianship roles and financial distribution.
Explore College Savings Options
With rising educational expenses, start considering college savings options like 529 Savings Accounts and Education Savings Accounts (ESAs).
Open a Custodial Account
Teach your child about finance from a young age by opening a custodial account in their name. Understand tax implications and choose an account type aligned with your objectives.
Prioritize Your Retirement
Amidst planning for your child, don't lose sight of your retirement goals. Stay committed to your savings plan.
First Service: Your Financial Partner for Parenthood
Embarking on parenthood is a beautiful journey, but it comes with its share of challenges. Allow First Service to be your trusted financial partner. Our experienced team is equipped to guide you every step of the way, from helping you set up tailored accounts to offering specialized financial advice for young families. Shape a financially secure future for your growing family today.