Financial Advise For New Parents: Five Things You’ve Got To Know
Parenthood is a whole new chapter of your life. It is exciting, promising, and full of unfamiliar but difficult challenges. What with the sleeplessness and constant caring for the baby before yourself, things can get pretty intense here. The last thing you would need at this stage is a financial crisis. Moreover, it is important to start planning for the future with a new member in your family. The weird thing is that when a baby is born, there will be no dearth of advice about how to feed or put your baby to sleep, but no one will tell you anything about how to plan your finances — this is something you’ve got to figure out all by yourself. So, here are a few tips for new parents who have a myriad of other things in their mind; hence, we have got your back, and thank us later!
Be Prepared To Make A Will
You must be thinking how absurd or morbid it is since you have just brought a new life on earth and you wouldn’t really like to think about your own death. Most people think along those lines and keep postponing it. However, a will is very critical when you have kids. Do it for their future and well-being. Life can be very uncertain, and you really don’t know what is going to happen in the next hour. Hence, for the safety of your children, prepare a will and appoint a guardian or an executor who can take care of it all in your absence. Choosing the right guardian is absolutely essential. Think of all kinds of scenario and find someone who can be the next best parent to your kid after you. An executor of the will is the one who pays all the bills and wraps up any debt that is left, so, choose responsible people who have been very close to you.
Upgrade Your Insurance
Insurance here would mean both your health and life insurance. Make sure your health insurance covers everything your baby might need or other emergency coverages that might be required during this time. Of course, most people take care of the health insurance part even before birth since during pregnancy, an upgraded insurance policy works much better. As for your life insurance, find out how much that would be by adding up your and your spouse’s policies. Now, do some quick math and find out if that amount would be enough to cover for a few years. If it doesn’t seem enough, maybe have some other policies that might generate a monthly income for your kid when you are gone or upgrade your life insurance to get even a more hefty apartment.
Start The College Fund
Here is another advice you might not have thought of at all. Planning for a college fund of your baby just when they were born sounds like a bit too much, but trust us, it is not. If you don’t want your child to be burdened by student loans for their entire youth, starting a fund might be a good idea. In fact, you can save on their school fees, too. Just set up a 529 savings account where you can transfer a certain amount every month and save on their education bills.
Have An Emergency Fund
With a baby around, you really can’t take chances. Hence, if there is an emergency, are you really prepared for it? Start putting money in an emergency fund which might come in handy during a crisis. Once you start putting money there, don’t stop till you have got enough to cover all your needs for at least six months. There might be unforeseen medical costs, too, where this fund might help.
Don’t Stop Budgeting
Budgeting is more important than ever now. Keep a track of your expenses. It is easy to get carried away and keep buying expensive gifts for the baby, but remember, money is important. It might be better to keep it for your future rather than spending it impulsively, so, think again!
However, don’t wrap your head around finances too much. Enjoy these times since these moments won’t last for long — the first time your baby smiled, the first time they walked or talked. Plan your finances so that you never have to worry about it, and enjoy every single second of your parenthood.
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