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Preparing for a Child

Article by Kelly Parker, Financial Advisor

Preparing for a Child

My daughter just celebrated her first birthday in March, and if I’ve learned anything over the last year, it is to make sure you’re prepared financially for all that parenthood will bring you! I wanted to share a few tips with you to make sure you’re ready for the next phase of your life.

  1. Health Insurance. Prior to the new arrival, make sure you review your health insurance plan and know what it will and will not cover regarding births. If you have an HSA, consider contributeing as much as possible. Those dollars are deductible to your income and will be useful for the baby’s doctor visits.
  2. Life Insurance: Review your current coverage and see if it needs to increase due to this major change in your life.
  3. Create a family budget. If you do not already have a family budget, create one. Allot for the childcare cost, if it will be part of the picture, or start budgeting for your household income to decrease if you choose for a parent to stay at home.
  4. Childcare: If you will be utilizing childcare after the baby is born, find out what the cost of childcare will be in your area. I’d also recommend getting on a waitlist at a preschool or childcare facility, depending on the area you live in, as it can be hard to find a place.
  5. 529 Plan, Insurance Policy Childs Financial Assets. Once the baby is born, consider setting up both a 529 plan and a life insurance policy. The 529 is a great tax-advantaged way to save for college. A life insurance policy with an additional purchase option will guarantee their insurability later in life.
  6. Update or create a will/revocable trust. It depends on how complicated your financial situation may be or based on assets to know if a will or both a will and trust is best for your family. We would recommend you speak with an estate attorney to get this accomplished. We are happy to make an introduction to one in your area if you would like.
  7. Create a schedule. I don’t think you have to have a concrete schedule, as every household will handle things differently, but as a family, it is good to have an ideal schedule laid out so each parent has realistic expectations of the other. The schedule will likely change once maternity/paternity leave is over but be thinking ahead the best you can.

These are just a few recommendations to help you ease into parenthood. Let our team know how we can help you make this life transition as seamless as possible!