With parenthood looming on the horizon, it’s only natural to want to do everything right. And with that in mind, financial stability is a must. After all, raising a family is costly, and improper planning can put a strain on your income—and in some circumstances, it can uproot your finances entirely. Thankfully, you really don’t need to be overwhelmed by it. Rather, focus on the key financial items that your family needs for security. Here’s our top 4 pieces of advice for new parents:
#1 Advice For New Parents: Health Insurance
A considerable portion of the expenses you will face in the course of bearing children will be medical in nature. With that in mind, it’s important to take stock of your health insurance coverage straight away the moment you know you’re expecting.
One thing you should definitely look into is whether or not your coverage provides for your birthing option of choice—for instance, an at-home birth with a midwife—so you can plan accordingly.
Another move you should also make is adding your baby to your health insurance policy. March of Dimes explains this ensures that your child’s medical expenses are covered, eliminating out-of-pocket costs that would surely put a dent in your family budget. You may even be eligible to switch to a plan with lower premiums and more coverage that’s specifically tailored toward the family.
#2 Advice For New Parents: Life Insurance
No doubt, among your responsibilities as a new parent is to look far ahead into the future and prepare for the worst-case scenario. After all, you don’t want to leave your family’s financial future hanging by a thread in the event something untoward happens to you, like a serious illness or sudden death.
As you start growing your family, you need life insurance more than ever. Depending on the kind of insurance that you get, life insurance works by paying out funds to your beneficiaries, which can cover a multitude of expenses, such as outstanding medical bills, funeral expenses, debt, and more. Best of all, getting life insurance while you are still young and healthy will inevitably keep your premiums low and affordable.
#3 Advice For New Parents: Legalities and Taxes
Addressing legal concerns is among the many financial steps you must take as you welcome a new child into the world. You should have a will drawn up, set up legal guardianship, and establish a revocable trust in the event something should happen to you before your children are adults.
It’s also time to update your tax forms. This is a move that’s often overlooked but is no less important since H & R Block notes this makes you eligible to claim tax breaks. In turn, you can lower your tax bill significantly. Even medical expenses and child care costs can be deductible, which often alleviates a good chunk of parental financial burden.
Additionally, if you own a business, this blog post suggests staying on top of your taxes, which may require paying quarterly taxes. By doing so, you can avoid penalties, late fees, and interest charges that could easily cause you to pay more in the long term.
#4 Advice For New Parents: Baby Gear
Finally, it’s easy to get sucked into a baby gear buying frenzy. There are so many adorable outfits and shoes, not to mention splurges like jogging strollers, trendy baby rockers, designer diaper bags, bottle warmers, and baby food makers. From a practical standpoint, it’s best to start with only what you truly need so that you’re not overspending on items you may not even use.
Start with a checklist for the essentials, and then take it from there. For example, when prepping your hospital bag, focus solely on necessary pieces like a hospital gown, maternity pajamas and a nursing bra, as well as a few onesies, diapers, wipes, and hand sanitizer. If you feel compelled to splurge on an item, go for something that will be well worth the expense.
Your family’s financial health should be one of your priorities, as it creates a ripple effect that touches other aspects of your life. These financial items and advice for new parents are just the tip of the iceberg, but there’s no better place to start. The road to financial freedom for your family is one that needs to be taken one step at a time, and with these items tackled, you’ll be ready for the journey.