This post is brought to you and contributed by an outside writer.
Every parent can attest that babies are expensive, but their cute smiles and big hugs make the money struggle all worth it. Whether you are a single-parent household or you have a partner, there are some questions you need to ask before welcoming a baby into the world.
1. Who will take care of the baby?
Childcare is very costly, especially in the US. According to experts, the cost surpasses that of housing, college tuition, and transportation annually.
In some homes, it is not uncommon to see a partner offering to stay at home and look after the kids as the other one works. This comes with its disadvantages, though, since the stay at home partner will miss out on an income reducing the money coming into the home.
They will also lose other benefits that employment brings, such as retirement accounts, healthcare, and the mental and social stimulation of a workplace.
2. What insurance policies will we need?
Talk to your employer about possible insurance options. A short-term disability policy would come in handy in case you are unable to continue working for some time. You could also look into writing a will and getting a life insurance policy for you as a parent. There are different types of life insurance policies, which can be valuable to your family in the future. Research about them on Money Monarch before you decide which one to buy.
3. What changes should we expect in our lifestyle?
One thing that is a guarantee is that your lifestyle will change when you have a baby. Some of the changes you can plan for so they don’t throw you off the life plans you have. You can decide to move away from the city and raise your baby in a more child-friendly neighborhood, but if you prefer the upbeat lifestyle the city provides, then it is up to you. You might want to evaluate the kind of car you drive and if it will be suitable for a child. If not, consider looking into a bigger family car.
4. How will you finance your child’s education?
We all agree that it is every parent hopes to give their child the best education they can afford. But not everyone can manage to save for college. It is in your child’s benefit to decide in advance how his schooling will be taken care of. If you want to save due to the compound interest it will acquire, then it is best to start early so you can have enough to cover their college fees.
It will come even handier for schools that are known to be expensive. It might mean having to channel a chunk of your savings to the education fund. Experts warn against diverting money involved for retirement to other avenues, including saving for education. If you are not sure of what course of action to take, it would be wise to engage a financial advisor to point you in the right direction.
Before getting a baby to ensure your finances are in order or there are systems in place to safeguard both you and your children’s future.