Getting Ready for Baby
You've set up the nursery. Now get your finances in order before baby comes.
I work with many young couples who are planning to start families. While having a new baby in the home is an exciting event, I always encourage my clients to prepare financially before making the decision to have children. Lots of young couples have fully furnished nurseries and closets full of baby clothes before they've even thought about the longer-term financial aspects of raising a family.
Here are a few things you can do to prepare for a new baby to reduce any money-related stress.
Review your current budget. Take a long and honest look at your current income and expenses. Make sure you can pay your current bills and new baby costs with plenty of wiggle room to accommodate anything unexpected. This is especially important if one spouse is planning to take extended time off from working to care for the young child. Make sure you're financially ready to make that decision.
Review your health insurance options. If you have the option to choose between a traditional PPO plan or a high-deductible health savings account (HSA) plan, make sure you dig into the benefits of each and decide which one best fits your budget and needs. If one parent is leaving work to stay home, don't overlook the premium increase for the working spouse to add them to an employer plan.
Readdress your life insurance. At this stage in life, many young couples don't have any life insurance outside of the small policies some employers offer. Even if you do have a separate life insurance policy, you'll likely need to increase the benefit level once you have children. Make sure your spouse and kids are taken care of should something happen by adjusting your life insurance now.
Bump up your emergency savings. Before taking the plunge and bringing that new baby home, make sure you have a solid emergency fund in place. During pregnancy and after a newborn comes home are prime times for unexpected expenses. Having a large pile of cash readily available can reduce any financial stress that might arise.
If you're thinking of starting a family soon, remember that our team can help you prepare on any the topics here, and more. We'll make sure to create a plan for baby that addresses your unique financial situation. Call us today.