Financial Considerations for New Parent. Having a child is a life-changing experience. While there is an incredible joy of watching your child take that first step or speak their first word, you can also experience a lot of stress when it comes to managing your family. In order to ensure that your family is financially stable so that you can enjoy those special moments with your little one, you will need to take some financial considerations. Here are some of them.
Childcare can be very costly. One of the best ways to save on daycare is not to use it at all. A good start would be to modify your schedule to share duties with your spouse if it is possible. However, if you really cannot do without daycare, research on your daycare options early so that you can select the best price and location.
An additional way to save could be to take advantage of your employer’s flexible spending account if it is available. This works by you funding the account with pre-tax dollars, and you can withdraw the money you spend on daycare tax-free.
Check with friends and neighbors to find out if there is anyone else looking for childcare and if you can be able to share the responsibility with them. If two or three of you can re-organize your work schedules, then there may be no need for you to pay for childcare at all.
This is an area you will want to analyze especially in terms of health insurance. Visit your human resource department at work to determine how and when to add your child to your plan. You will need to figure out if it makes sense to upgrade your plan or change altogether.
Most insurers will cover costs such as visits to a pediatrician, after the birth of your baby before establishment of your coverage but you will have to add your child to your insurance plan usually within thirty days. Consult with your insurance advisor on what kind of coverage best suits your financial plan.
As a new parent, it is easy to forget that you need to take care of yourself as well. This is why most people forget to put away funds for when they retire. If you have a company sponsored program, your automatic deposits will keep you on track.
However, if you rely on self-funded savings account with no regular payment system established, this is the time to get serious. Figure out what you can realistically budget each month and set up an auto-pay from your bank account.
With the arrival of your child, comes the need to think about their future. It is realistic for you to think about how they will get through college. Talk to your financial planning professional about college saving plans.
Some of the plans available have tax incentives provided that the money is for expenses linked to education. There is some flexibility on how much and how aggressive you can and should be, so it is advisable to discuss your goals with an expert.
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