Financially Preparing For A New Baby: Essentials Checklist
When expecting a child, plan ahead with these eight financial planning tasks from Integritas Financial, so you can focus on your new addition!
On average, it could cost up to $19,000 in health-related costs to have a baby including pregnancy, birth, and postpartum care. The next 17 years could cost close to $250,000 if your child does not attend private school. This includes housing, healthcare, food, childcare, education, clothing, transportation, and miscellaneous expenses. If your child attends a private college you could pay over $200,000 over those 4 years. The average cost of a wedding is about $30,000 and rising. This totals up to about $500,000 per child if you pay for their wedding. This means if you have 2 children you could pay over $1,000,000 to support them. This isn’t meant to scare you away from having kids but rather encourage you to prepare for this responsibility. Here is a list of 8 financial tasks you should prepare for when expecting a child from Integritas Financial.
Health Insurance for the Expectant Parent
Prior to trying to have a baby, look for insurance with a low max-out-of-pocket and low deductible. If you have a preferred hospital, make sure it is in network for your coverage. Consult your HR department or financial planner to explore coverage options. This could save you a lot of money upfront.
Health Insurance for Baby
Add your baby to your plan. This typically must be done in the first 30 days of birth to provide retroactive coverage. Call your provider ahead of the delivery date to learn about their policy.
Update/ Draft a Will
Wills assign a guardian for your child if something happens to you and your partner, and assign your belongings to the beneficiaries you choose rather than a court deciding.
Life Insurance – Term
Term life insurance fits in most budgets and you’ll have peace of mind knowing that your family will be ok if something happens to you.
You can potentially get this from your employer at little to no cost. This will replace your income if something happens.
As you can see, your budget will need a complete overhaul. Add anticipated expenses for your new addition such as more groceries, different insurances, day care, education, clothing, etc. Kids become more expensive over time so having a bulletproof budget is the key to a successful financial plan.
Extra Emergency Savings
Stash at least 3 to 6 months of income in an account that can be easily accessed. This will act as self-insurance for emergencies such as medical costs, lost income, or a busted furnace.
Start saving money in tax advantaged accounts such as a 529. They provide potential state tax deductions and allows you to pay tuition with after tax dollars. This is one of many ways to fund education.
All of this is generalized advice which means it could be the wrong solution for your situation. Make sure you consult with your financial planner before acting on any advice.
Ryan from Integritas Financial supports the Main Line Parent Community. You can teach out to IF for a complimentary portfolio review to see if your investments are aligned with your goals and you aren’t being overcharged by your current advisor or your investments. PLUS, free access to Ryan’s budgeting software that turns into your financial plan!
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You can find more tips from Ryan on his blog or on a publication where he was a contributor: