Planning on having a baby? Here’s a list of financial must-dos every prospective parent should keep in mind before having a child.
Having a baby is the greatest joy on this earth, but it is also one of the biggest responsibilities out there. Before welcoming a child into the fold, it is imperative that you start planning and budgeting yourselves financially so that you’re well prepared to take on any expenses that comes your way.
If you aren’t sure where to begin, here’s a list of financial must-dos every prospective parent should keep in mind before having a child.
Ditch your old lifestyle
Yes! Time to reign in your spending, especially when it comes to swiping your Credit Card at the drop of a hat. You may have been spending unnecessarily on clothes, accessories, restaurants, and clubs all this while, but now it’s time to reel it all in.
Of course, we aren’t saying that you shouldn’t spend on a night out every now and then. Just don’t do it too often. With the arrival of your little one, you’re going to be left with lesser disposable income for all your needs.
This is why it is important to prepare yourself to make major lifestyle adjustments to save up for your child’s needs.
Additional Reading: 5 Investment Ideas New Parents Can Consider For Their Child
Revise Your Budget
When was the last time you checked your budget? If you haven’t in the recent past, it’s time for you to revisit your budget and make changes.
With the little one on its way, you’re going to see additional costs for necessities such as diapers, baby food, baby’s medical expenses, baby’s clothes etc. eating away at your income.
Prepare your new budget with these costs factored in so that you will have a clear idea of the expenses coming your way.
Additional Reading: Household Budgeting For Homemakers
Get Life Insurance
After all, family is very important. If you haven’t already taken out a Life Insurance policy, now is the time to start thinking about it in earnest. Make sure that you opt for a policy with an adequate cover.
If you already have a Life Insurance plan in place, then you must approach your agent and increase your coverage to suit your new lifestyle and the future needs of your little bundle of joy.
Additional Reading: Top 5 Life Insurance Plans Of 2018
Employer’s Maternity Policy
It would be wise to keep yourself up to date with your employer’s maternity policy and benefits. Most companies today offer expecting mothers between three to six months of paid maternal leave.
You could also opt for a sabbatical, although you will not be paid for this period. So, make sure that your finances are in place before applying for leave.
Additional Reading: How To Plan Financially For Maternity Leave
Start Investing For Long-Term Expenses
Don’t put off your long-term investments for later. The earlier you start putting away funds, the more you’ll accumulate by the time the event occurs. With healthcare and education costs in the country rising year after year, you have to start saving for your child’s healthcare and education expenses even before you decide to have a child.
Additional Reading: How To Manage Big Future Expenses Successfully
Health Insurance? Yes!
Get a Health Insurance policy before you plan to have a child. Although Health Insurance is necessary in the long run, you could opt for a policy that comes with some maternity benefits.
It would be even better if the maternity benefits include pre-natal and post-natal expenses. Maternity insurance is often offered as a rider along with your Health Insurance policy. Make sure that the maternity insurance covers your newborn baby as well.
Additional Reading: Maternity And Health Insurance: What You Need To Know
Plan Your Will
Tragedies can happen anytime. What would happen to your child if something happens to you, your spouse or both of you? In case of such tragic events, you’ll need someone to take care of your child.
You can start by designating one of your close relatives as your child’s guardian. In addition to this, you could also create a trust fund. A trust fund is an effective financial tool to accumulate wealth for your child.
Additional Reading: 5 Extremely Important Reasons To Consider Writing A Will
See, it isn’t very hard to financially plan for your child. Just make sure that you start preparing yourself well in advance to avoid any surprises later.