Financial Considerations for First-time Parents

Though babies are sweet, and starting a family is a joyous occasion, there’s no denying that having a child is expensive. From doctor’s visits to diapers, there are countless expenses that the newest and cutest addition to your family will bring. While there’s no getting around many of the baby-related costs, it’s important that first-time parents make an effort to become financially savvy.

If you’re preparing for a new bundle of joy, take these important financial matters into consideration:

Pay Down Debt

If you’re like most Americans, you have debt in some form or another already. Before baby arrives, be sure you have a manageable plan to pay down this debt, or make an effort to pay it off completely if you can afford to do so. As you begin to make purchases for your new baby, it can be easy to lose sight of your debt repayment goals. Heading this off with careful analysis and planning will make spending after the baby comes easier and less stressful.

Save for College

Yes, you’ll have nearly two decades after your baby is born to save for their education. But that doesn’t mean you need to, or should, wait that long to start saving. College is expensive; Do yourself and your child a favor and begin planning right away. One of the most popular methods of doing this is through a 529 College Savings Plan, Time Money explained. These are accounts that can only be used on education expenses, such as tuition, room and board or books. Any growth your plan experiences over the years is federal tax free. They can be used for anyone in your family, so if Baby No. 2 wants to pursue higher education one day, that money can be transferred between siblings.

Plan for Your Own Retirement

No two parents are the same, and not all parents begin their families at the same points in their careers. But whether you’ve thought much about retirement before, having a child should encourage you to start planning ahead. Since having children is so expensive, it’s easy to let life get in the way of retirement saving. Don’t let this happen. Immediate expenses may seem more important now, but your financial stability in your golden years won’t just affect you – it’ll affect your children, too. Start saving for retirement as soon as you can so you and your children won’t have to worry about making ends meet after you leave the workforce.

Life Insurance and Estate Planning

When you’re bringing new life into the world, it may not feel natural to think about death. While your untimely end isn’t fun to think about, as a new parent, you are responsible for planning for any future your child may have. As such, now is the time to update your will, or write one if you don’t have one yet, Time Money suggested.

It’s also prime time to take out a life insurance policy. No parent wants to consider a world without their new child, but tragedies do happen. Children’s life insurance policies are generally affordable, since they typically only cover the cost of the funeral.

Having a baby brings up all kinds of financial questions. This is normal, though also crucial that you get these questions answered. Turn to Bank Midwest when you have financial concerns about your growing family.

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