By Paula Brancato, Barnum Financial Group
New parents have a lot of questions and concerns, ranging from did I install this car seat correctly to, is this baby food the most nutritious option? However, when it comes to your financial questions for your family, you don’t have to go it alone.
Here are some tips designed for new parents looking to make financial adjustments for both today and tomorrow:
#1: Analyze your budget – Because raising a family costs a good deal of money, it’s important to budget wisely for the new expenses you’ll encounter as a parent. Here are some ideas that may help:
Get a good handle on your finances by setting up a new family budget. There are lots of online tools (many free) that can help you get started. One great example is www.mint.com
Be sure to check out parenting websites, which can give you great tips on parenting and help you understand how much baby-related essentials such as diapers, wipes, and formula will cost you.
Don’t spend money on unnecessary items. Do you really need to buy everything new? Can you shop for brand names on discounted sites? Have you Googled parent sites that share savings and giveaway tips?
If you don’t already have one, start an emergency fund. When unexpected costs arise, you’ll be ready. The experts say, provided you have a steady income, you will need to sock away 3 to 6 months of expenses, including rent or mortgage, childcare, food, utilities and incidentals.
#2: Keep your baby healthy. Be sure to add your new son or daughter to your health insurance plan(s) right away. Most insurance companies require that your baby be added to your medical plan within 30 days of birth. Amidst all the changes, it’s something that can easily be overlooked, but not easily corrected.
#3: It’s all in the name. Be sure to update your beneficiaries on any employer-sponsored benefits you may have, such as group life insurance or retirement accounts. Beneficiary designations must be made through your employer or your company’s insurance carrier.
#4: Keep your family’s finances healthy. Once you’ve become a parent, it’s more important than ever to make sure your family members are covered in case the unexpected should happen. While these are difficult things to think about, as a parent, you need to plan for the unforeseen events that could have a financial impact on your family. Get a check up and make sure that you understand just how disability income insurance can protect a portion of your paycheck, and how life insurance can help protect your family’s lifestyle in the event the unexpected happens.
#5 Plan for tomorrow but starting today. Consult your legal advisor to discuss your wills or any trusts you need or that should be updated. For example, if you decide to make your child, under the age of 18 years old, the beneficiary of any insurance policies or other assets. Be sure to tell your attorney whom you wish to designate as the legal guardian of your children. That way if an unforeseen event occurs, the decision is not left in someone else’s hands.
As in any life plan, the best offense is a good defense. And there are skilled professionals who can help you create an overall plan.
Paula Brancato MBA, CFP®, CEPA, CLTC is a registered representative of and offers securities, investment advisory and financial planning services through MML Investors Services, LLC. Member SIPC. www.sipc.org 6 Corporate Drive, Shelton, CT 06484, tel: 203-513-6000. Paula may be reached at firstname.lastname@example.org or 646-813-9590
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The information provided is not written or intended as specific tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel.