Parenthood can be the most beautiful phase of one’s life. The little soul can bring happiness to the whole family making it a moment full of joy and pride.
Along with this happiness come bigger responsibilities. When we talk about expecting a baby, it is not only about buying tiny clothes or getting heart touching ultrasound photos. It is also about the upcoming financial responsibilities.
Most parental responsibilities are learned on the fly-like, how to change the diapers for instance. However, financial planning needs a lot of preparation. Here is a list of things that should be taken care of to be financially ready for the newest member of the family.
Health Insurance and other expenses:
Although you have health insurance, having a baby can be expensive, especially if you don’t anticipate the additional expense. Some of the major expenses to include while forecasting your medical expenses plan are prenatal care, labour, and delivery.
What is the duration of parental leave that you and your partner will get? Also, whether your leave will be on paid leave or not. Be clear with both your company policies and the applicable laws.
Drafting your pre-baby budget is important, considering all medical expenses will be borne by you. Do a proper calculation of how your income will be affected by the new addition. Adjust your budget accordingly. The expenses of a baby can be plenty, so set aside an additional amount for the unseen expenses.
There are many recurring costs post-delivery, like diapers, childcare, and extra food. It will impact normal household expenses for years to come. Prior planning will prevent you from getting caught off-guard.
Babies are more prone to injury. Additional unexpected expenses along with the normal cost of raising the child can take a toll on you. It is recommended to have at least three to six month’s worth of living expenses in reserves for a rainy day.
Health Insurance and Life Insurance.
Based on your employment healthcare plans, your child can be added to an existing health insurance policy either within 30 days or 60 days of their birth, based on the employer. Make sure to do it as soon as possible, if you don’t want to be caught holding a sick baby without coverage. Same goes for life insurance.
Adjust the Beneficiaries:
If you already have a life insurance policy for yourself and your spouse, you may want to add your child to the list of beneficiaries. However, you may need to make a few adjustments to ensure how and when your child can access it.
Savings for Education:
Education is becoming more costly with the passing time. To ensure an enriching education for your child, you need to start saving from the initial phases.
A new member means a lengthy list of responsibilities, so try to achieve them one at a time. Start to prioritize your financial goals. A systematic approach will straighten up most things, letting you enjoy the happiest phase of your life.