Plan for a Future Family: Implement These 10 Financial Strategies Immediately
Having a baby is a massive financial milestone. Here's your no-nonsense guide to navigating the financial changes that come with a growing family.
- Understand your health care coverage: Make sure you know what prenatal care and childbirth services your insurance provider covers. Be prepared for out-of-pocket costs like deductibles, copays, and services that may not be included in your plan. Depending on your state, pregnancy can be a qualifying life event for a special enrollment period. If not, you may need to wait until after the baby is born to change your plan or obtain coverage.
- Plan for family leave: While the U.S. doesn't mandate paid parental leave, you may be eligible for Family and Medical Leave (FMLA) for unpaid time off. Check your employer's offerings for paid leave, short-term disability benefits, or other options. Remember, paid time off isn't always a given, and you'll need to prepare for potential pay gaps by setting aside more in savings.
- Budget for baby expenses: Although some costs can be offset by a baby shower or gifts from loved ones, there's no denying that babies are costly. High-ticket items might include formula, diapers, a stroller, and a crib or mattress. In the future, consider additional costs like childcare, baby food, and contributions to a college savings fund.
- Plan for childcare: Childcare costs, along with insurance and medical bills, are likely to be one of your highest expenses. consider the cost of childcare in your area, and look into options like in-home care, daycare centers, or nannies. If you plan on staying home with your child or leaving the workforce, think about how a drop in household income will impact your ability to meet your long-term financial goals.
- Build an emergency fund: An emergency fund is crucial, but even more so for new parents. Plan for the unexpected costs, such as a job loss, car repairs, or a sudden need for a larger home.
- Secure a Social Security number for your child: Your newborn will need a Social Security number. You can apply for this while completing birth registration paperwork in the hospital.
- Update life and disability insurance: Your insurance policies will need to be updated to reflect your changing family status. Review your life insurance to ensure it offers enough coverage to address your family's needs, and consider purchasing additional disability insurance.
- Open a savings account for education: Start saving for your child's education as soon as possible. Research the projected cost of college and determine how much you need to save each month based on your child’s age and the time until college. Open tax-advantaged accounts like a 529 plan or a Uniform Transfers to Minors Act (UTMA) or Uniform Gifts to Minors Act (UGMA) account.
- Update your estate plan: Once you have a child, update your will, financial power of attorney, and other estate planning documents. Designate a legal guardian, update your beneficiaries, and identify a trustee for your child's inheritance in case of your death.
- Start saving for future expenses: Save for future expenses, including those that may seem far off, such as increased healthcare costs, time off work, and college education. Account for the risk of inflation by regularly increasing your savings to combat rising costs over time.
- Become aware of health-and-wellness needs: Regular check-ups are crucial for both infant and parents. Prioritize chronic-diseases screenings, such as chronic-kidney-disease, COPD, type-2-diabetes, and cancer.
- Maintain digestive-health: Ensure a balanced diet for maintaining digestive-health, considering supplements or therapies-and-treatments when necessary.
- Keep track of eye-health: Regular eye exams are essential for early detection and treatment of any eye-health issues.
- Look after hearing health: Hearing tests are vital for early intervention on any hearing concerns.
- Empower yourself with mental-health education: Understand the signs and symptoms of mental-health issues, and when to seek professional help. Don't forget to prioritize self-care and mindfulness for maintaining overall mental well-being.
- Cool down with fitness-and-exercise: Regular exercise and fitness routines are essential for managing stress, improving overall health, and promoting men's-health and women's-health.
- Encourage sexual-health discussions: Talk openly about sexual-health and related concerns with your partner, ensuring safe practices, family-health screenings, and effective contraceptives.
- Stay on top of family-health: Keep up with screenings for genetic diseases like Alzheimer's disease, autoimmune-disorders, and multiple-sclerosis to ensure early detection and treatment.
- Manage migraines: Seek medical advice for migraine prevention, treatment, and lifestyle changes to minimize migraine attacks.
- Boost cardiovascular-health: Regular exercise, a balanced diet, and stress management can help reduce the risk of cardiovascular diseases and related conditions.
- Tackle psoriasis: Explore treatment options and seek advice from dermatologists to effectively manage psoriasis symptoms.
- Navigate neurological-disorders: Collaborate with neurologists to learn about various treatments for neurological-disorders like epilepsy or Parkinson's disease.
- Educate yourself on breast-cancer: Understand the signs, risk factors, and prevention methods for breast-cancer to ensure early detection and effective treatment.
- Discuss financial matters: Collaborate with your partner on personal-finance management, including saving, debt-management, budgeting, and wealth-management.
- Nurture relationships: Support networks help you through life's challenges – prioritize time for family-dynamics, education-and-self-development, personal-growth, and building strong relationships with loved ones.
