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Finances for First Time Parents

by Paisley Hansen | 24-05-2022 07:24 recommendations 0

If you and your significant other are expecting your first child, you are likely excited and even a little nervous. A child is a big responsibility, but parenthood can be very rewarding. You probably read books about all of the different milestones and stages your little one will go through, but not very many people talk about money when it comes to being a parent. The earlier you start preparing for the future, the better off you will be. You should read this article for 5 money tips for first-time parents. 

Take a Look at Your Budget

In order to truly be financially healthy, you have to look at your budget very closely. This will require more than simply what your income is. How much do you currently spend on groceries and takeout? Is that number reasonable or do you need to reallot that amount in other areas?

You should both sit down with a pencil and paper and a calculator and talk about where you want to prioritize your spending. Be realistic about your house bills, shopping habits, and car payments. Choose numbers that you are both comfortable with. If you would like financial advice from a professional, look into a business like Captive Solutions for help

Start Saving for College

If you wait until your child is in high school to start thinking about how you will help pay for their college education, you have waited entirely too long. When was the last time you looked at your local colleges and universities' tuition and books costs? They have more than likely gone up tremendously since you were in college. 

Consider looking into a 529 college saving plan. It is similar to a 401k plan, but for college expenses. Do not forget about room and board if you want your child to have the full college student experience. You could start with $2,000 or so to open the savings account, and then deposit $100 or $200 a month after that. This amount of money will add up quickly. 

Invest in Life Insurance

You or your spouse passing away is not a fun fact to think about. It probably feels like something that will not happen for a very long time, and hopefully, that is true. However, even if you are both young and in great health, accidents and unexpected events do happen in life. Preparing for the unforeseen is the responsible and wise thing to do. 

Research different life insurance companies and types. Find one that will give you peace of mind should one of you be left alone to raise your child. Also, take into account the possibility that something happens to you both, and your baby needs to be taken care of. 

Research Other Accounts

With your family about to grow, now is a great time to talk to your job's benefits coordinator. Let them know that you are expecting a child and ask them for recommendations. It is reasonable to assume that your benefits package offers the option to open a Flexible Spending Account. 

A Flexible Spending Account is a savings account that is contributed to with pre-taxed funds. This money can be spent on expenses like daycare, after-school programs, medical costs, prescriptions, and copayments. If it is not time for open enrollment, be sure to request this when the time comes. 

Create a Will

This is another uncomfortable task that many people do not want to have to think about. But the truth is that having an updated will is something that will make the life of your child and family members so much easier. 

It is smart for you to decide who you would want to take guardianship of your child should you pass away. Also, take the time to document where you want your money and other assets to go should this happen. Do not leave these huge decisions on your child's shoulders. 


PaisleyHansen

  • United States Of America Chaperone Paisley Hansen

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