I hear someone is expecting a baby! That’s just the best news, isn’t it? There’s nothing quite like being a parent and all the fear, stress, joy and excitement it brings.
Believe it or not, I’m not just NYC’s Financial Advisor for Millennials, I’m a parent, too.
If you’ve got multiple kids, you’re likely already a seasoned pro at this. So, I want to address the first timers in the room.
According to the U.S. Department of Agriculture, it’ll cost a little more than $245,000 to raise a child until the age of 18. That sounds like a pretty excessive number, but don’t forget, this figure can and will change depending on the part of the country in which you live. I talk a bit about it in the blog post The Cost of a Nuclear Family + House.
Today, though, I’m going to share just a few tips to financially prepare for your new bundle of joy.
- Identify your financial goals – C’mon, guys. This really goes without saying, but I’ll say it anyway: identify financial goals. Setting goals to save is one of the most important things you need to secure yours and your new baby’s financial future.
- Make a budget and track your spending – Unless someone is planning on staying home and taking care of the new baby indefinitely, having to adjust your budget and spending to account for childcare is just one of the musts. Recalculating your monthly budget will help you plan and assimilate better into your new role.
- Set up an cash reserve for possible emergencies – This tip is something many experts recommend you do before you have a baby. If you’re a bit behind the 8-ball, no worries. You should keep 3-6 months of emergency money on hand. Again, try to do this before the baby arrives, and don’t feel limited to just 3-6 months. Save as much as you can for as long as you can.
- Automate your payments – Being a new parent—or a parent in general—means your time is not your own. Your baby will dictate your daily schedule, as it should be. While you’re staring in amazement at the beautiful human you’ve made, you don’t want to worry about accidentally missing bill payments or forgetting to transfer money from checking to savings. Set up automated deductions and bill pay to make sure your financial goals are still being met as you ease into life as a parent.
- Shop for life insurance ASAP – This is a no brainer. If something, God forbid, were to happen to you or your significant other, what would become of your family financially? You don’t want to leave your innocent baby and family high and dry. Make sure you plan for any and everything so your child’s livelihood is covered.
Like I said, there’s nothing like having kids. And while there are some things you really can’t anticipate before their arrivals, there are a few things you can and should be preemptive about when it comes to your little ones and their futures.