11 financial tips for starting a family
June 13, 2023
Starting a family is a big moment and a great turning point in life. Babies are adorable, but having a family affects relationships, health and happiness, and wealth. Taking the time to plan will help you and your partner be on the same page, strengthen your bond, and enjoy growing your family.
We hope this article has helped you explore the financial demands of having a large family and the impact on your spending plans, and help you understand what you need to do financially to keep planning. .
1. Check your health insurance. Plan out-of-pocket costs for fertility treatment and birth costs. Your monthly medical insurance premium will increase as new dependents arrive.
2. Plan a family vacation. Taking time off from work can reduce your income.
3. Childcare arrangements. Perhaps the biggest increase in monthly expenses will be childcare. Explore available childcare options and choose affordable options.
4. Budget your newborn. Your spending plan will change as your child grows. There will be many competing demands for your money. Stay on track with this newborn budget guide.
5. Top up your emergency fund. Your emergency fund should cover 3-6 months of your expenses. Make sure your emergency fund is fully secured for additional expenses and potential loss of income.
6. Get Your Child’s Social Security Number. You can request a social security number along with your baby’s birth certificate.
7. Renew life and disability insurance. It made me want to have proper life and disability insurance so that my family would be okay if something unexpected happened.
8. Start saving for college now. Saving for college is like saving for retirement, and the sooner you start, the easier it will be to save the money you need to reach your goals. Open your 529 plan and start donating as soon as possible.
9. Start saving for future expenses. As your baby grows, there will be additional expenses for children’s activities, summer camps, hobbies, and more. Start saving and investing in a brokerage account so you have money saved for future expenses.
10. Take advantage of tax relief. Some relief from all these increased expenses. When you file your taxes, be sure to use the Child Rearing Allowance Tax Credit. Employers may also offer opportunities to contribute to the Healthcare FSA, Dependent Care FSA and HSA. These plans allow you to make pre-tax contributions and use the funds tax-free for eligible expenses.
11. Have a good inheritance plan. Designate a guardian for your child in case the unexpected happens. Without proper legal documentation, the court will decide who will care for the child.
Being a mother of two boys has been one of the greatest joys of my life and it is the same for you. As with most things in life, taking the time to plan will give you peace of mind. If you need guidance on creating a newborn budget, we can help.