Becoming a parent can be one of the most exciting times of our lives – but it also comes with a big financial commitment! If you’re about to become a parent for the first time, here are a few tips and tricks to help you prepare for and secure your financial future:
- Create a new budget for baby items. Your current household budget is about to change! Brainstorm any one-time and recurring baby-related costs you can think of and add them into your budget plan. Think clothes, diapers, childcare, medical care, etc.
- But don’t forget about retirement or other long-term savings goals. Ideally, your baby budget will fit hand in hand with your current budget, preserving your emergency fund, retirement savings and other expenses.
- Make a plan for your baby’s health insurance. Newborn healthcare appointments can be scheduled just days after they’re born! Prepare early - speak with your Human Resources representative to plan for getting your baby on your health insurance policy as soon as possible.
- Start saving for college! It’s never too early to start thinking about your child’s higher education opportunities. Consider starting a 529 College Savings Plan, which is tax-free when used for higher education expenses.
- Update your beneficiaries. If you want to ensure that assets will go to your new child should something happen to you, you will need to update your beneficiary information on all your accounts. Think 401(k)s, IRAs, life insurance policies, bank accounts, etc.
REMEMBER: Minor children cannot inherit certain assets, so you may need to establish a trust or name a custodian who will receive those assets on the child’s behalf.
