Becoming a parent is an exciting time in your life. It's a phase where you are happy and nervous at the same time. You may have been preparing for this event for a long time, but when you actually experience it, things sometimes seem uncontrollable and terrifying.
Financial planning should be done before the arrival of the baby so that you can be prepared for the change in your expenses. It helps to have a plan when you welcome a new family member home. Having a plan and financial matters sorted out before the arrival of the baby can help ease the burden and help give your new baby your undivided attention.
Create a budget.
Budgeting is an important step when you know there will be a change in your cash flow. If you are new to parenting, you might not be able to calculate the exact amount of costs you are going to incur on baby-related expenses. If you are not sure what to add to your budget, talk with family members, friends, or co-workers who have children and are comfortable sharing some of those expenses. If you plan to use a daycare or sitter, make sure you take into account all of the fees associated with those services. (For more tips on how to stick to your budget while preparing for your new arrival, read our article 8 Tips to Help You Stick to Your Budget.)
Get employer's benefits.
Benefits can save you from many financial worries that you may face during the initial stages of your parenthood. There are different kinds of employee benefits that may be available to you. The most common are life insurance, medical insurance, and child care. Make sure you factor any monthly premiums or annual deductibles for these services into your budget. Once you’re informed about your benefits, you can worry less about the health care of your baby.
Always have an emergency plan.
Things tend not always to go as planned. Occasionally, you may need to spend money on an emergency or an unforeseen circumstance. For situations like this, it’s a good idea to have some emergency cash in a secondary savings account or access to a line of credit. Prepare ahead of time as the unexpected can often occur during the first year when the baby is born.
Prioritize the savings.
It may seem difficult to think about saving for the future when you're busy raising children. Saving goals can make things easier for you. You may want to start with a Christmas Club account for the holidays, a Cookie Jar account for the rainy day fund or even a Super Saver account.
Consult an advisor.
Consulting with your financial advisor is important. Whether you want help with your budget or savings, your advisor will get you through it. Consulting with a financial advisor can help ease concerns and some stress you may have.