7 Crucial Financial Planning Guidelines for New Parents
Maybe you have a baby on the way, or perhaps you’ve just welcomed a new bundle of joy into your family. You’re excited to start this new chapter of your life as a parent – but at the same time, you can’t help but feel stressed about the financial responsibilities of supporting your growing family. That’s why proactive financial planning is crucial for parents!
You can find lots of other tips on being prepared for anything from The Prepping Wife to help you live a budget-friendly lifestyle and a lot more. Furthermore, you can follow these recommendations to tackle home repairs, get the right insurance coverage for your family, start saving for your child’s future, and more!
Take Care of Home Repairs Quickly
Before your baby arrives, it’s important to tackle any home maintenance issues. Not only will this make your home safer for your whole family, including your new arrival, it’s also a good habit to get into since it can save you money in the long run. Ignoring an appliance or system repair can lead to more damage – and higher costs to fix it – down the road.
For instance, maybe you’ve noticed some issues with your heating or air conditioning recently. You’ll want to get in touch with a reputable HVAC contractor as soon as possible so that you can remedy the problem before your baby’s due date. To address your heating and air conditioning repair needs, check out online directories and search for highly-rated contractors in your zip code.
Create a Realistic Budget
Once you’ve addressed any pressing home maintenance issues, it’s time to sit down and create a realistic household budget for your family. Perhaps you and your partner didn’t bother with strict budgeting before – but now that you’re parents, you’ll want to start carefully tracking all of your income and expenses.
To establish a budget, VeryWellFamily recommends calculating your overall household income, listing your expenses in categories like mortgage payments, utilities, and groceries, and tracking your spending to ensure that it does not exceed your income.
Identify Your Savings Goals
In addition to your expenses, your budget should also leave some wiggle room for your savings goals. For example, perhaps you want to start saving up to move to a larger property when your child gets older, or maybe you’d like to begin putting away money for your child’s college education. Determine your specific savings goals and how much you’ll need to save per month to achieve these goals. Incorporate these figures into your budget.
As a parent, figuring out the right insurance policies for your family can get complicated. You’ll need to add your child to your health insurance policy right away, and you’ll also want to start looking into life insurance and disability insurance policies. You may want to speak to a financial advisor who can help you determine the level of coverage your family will need.
Read Up on Tax Breaks
Yes, raising children can get expensive. But here’s the good news: as parents, you and your partner will qualify for some tax credits, which can help ease your financial burden! Fatherly states that depending on your specific situation, you may be eligible for the Child Tax Credit and the Child and Dependent Care Credit. If you are adoptive parents, you can get some financial relief in the form of the federal adoption credit.
Increase Your Emergency Fund
Maybe you and your partner started building an emergency fund well before you talked about starting a family. But now that your baby is here, you’ve realized that you’ll need to increase the amount in your emergency fund so that you can cover expenses for three people during tough times rather than just two. Take a look at your updated monthly budget and calculate how much you would need to cover six months of living expenses for your family.
Finally, it’s time to start thinking about estate planning. You might have tackled some basic estate planning tasks before having your baby, such as writing a will, but now is a good time to connect with a lawyer who specializes in this area. You will need to appoint a guardian for your child in case you are ever unable to care for them, determine who will receive your assets when you pass away and how they will receive them, and decide who will be responsible for ensuring that your estate plan is carried out in your absence.
7 Crucial Financial Planning Guidelines for New Parents Notes
Becoming a parent marks the beginning of an exciting new journey. If you’re worried about your family’s financial stability, remember that knowledge is power: the more you can learn about personal finance, the better! With these tips, you’ll be able to build a bigger nest egg, spend less on home maintenance, and take on big projects like estate planning.
7 Crucial Financial Planning Guidelines for New Parents Discussion
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