5 Financial Planning Tips for New Parents
NEW YORK, November 27, 2023 (Newswire.com) - There may be nothing in life more profound, rewarding, and momentous than the birth of a child. Truly, it is an event like no other.
But a newborn comes with financial responsibility. You want to do everything possible to properly care for the infant and give them a great start, while making sure household finances are in order. That could mean everything from buying new insurance to investing in alternatives through Yieldstreet.
Whether you have a new baby or are expecting one soon, here are five financial planning tips for new parents.
Establish First-Year Baby Costs
Even with healthcare, new parents must factor in expenses related to prenatal care, including procedures and doctor visits. Also, determine whether you’ll need temporary home care for your situation, and calculate essential first-time purchases such as a crib and bedding, transportation-related items including a car seat and stroller, as well as high chair and other “feeding” equipment.
Get the Appropriate Insurance Mix
Protecting your growing family also means making sure you have the proper mix of life, health, and disability insurance should you experience a disability or chronic illness or are no longer around to care for them. This may mean updating your health insurance coverage and knowing your deductible, considering purchasing a life insurance policy, and looking into disability insurance.
Rework the Household Budget
It’s important to identify likely changes in your household income and costs, especially if you or your spouse are mulling taking an unpaid work hiatus to properly care for your newborn. It may be time to slash some non-essential expenses, establish or rebuild your emergency fund, and have conversations about future childcare costs as well as how to save for retirement. Don’t lose sight of your Golden Years when planning for 18 years or more of support.
Prepare for College Expenses
College costs are at an all-time high, so there’s no time like the present to begin preparing for your child’s education. Speak with your financial advisor about savings and investment options, which can include tax-advantaged accounts for college expenses as well as long-term opportunities in alternative assets through investment platform Yieldstreet. Be sure to consider what is a broad range of options, whether you’re a retail or accredited investor.
Update and Organize Legal and Financial Documents
Having a new baby in the house is exciting and prompts nearly nonstop activity. Amid the hubbub, though, it is essential to keep track of, organize, and key legal and financial documents such as powers of attorney, health care proxy, and trust documentation. Put such records in a safe or safety deposit box -- and be sure to keep copies on hand.
By acting on this list of five financial planning tips for new parents, you can remove much of the financial uncertainty and surprise from parenthood -- and relish this new and very exciting life stage.