Financial Planning: Don’t let that bump become a speedbreaker
Planning a family, conceiving, waiting for the little one to emerge, and the years that follow are some of the happiest experiences you will ever have. In addition to the gift of a new life, parenthood changes the way people look at things. One of the more urgent concerns for many couples is financial planning. Expenses for the new addition to the family and how to meet those expenses. Chances are one of your incomes will take a hit for a few months to a few years depending on your parenting choices. In addition, consider higher grocery bills, maternity clothes, doctors visits, tests, meds, birthing stay expenses and social gatherings – it adds up to quite a bit. And all of this is before the baby is even here.
Here are a few quick pointers to help you plan for the arrival of the new one.
Get your finances in order
Start budgeting and saving by reviewing your income, expenses and investments. The man who doesn’t know where his last dollar went doesn’t know where his next is going to come from. Also, in your 20s and 30s, it is not uncommon to have not shored up on your personal finances to a position of great strength. Look at all your expenses and eliminate all that are non-essential as early as possible and start putting money away. Look at how your investments are doing and what your available or potential savings are. Consider Personal Finance Apps to help you budget better.
You will be spending on the pregnancy right through, starting with doctors’ visits and all that goes with it. If the visits are long, chances are you will be eating out, especially if you are a working couple. You will need new clothes and you will spend more on food. You might be planning a baby shower or social gatherings to announce and celebrate the news. The delivery itself can cost a packet, depending the level of care and comfort opted for. Write all of these down and make a plan on how you will meet these expenses. Do check how much of these expenses are covered by your Medical Insurance and plan for the rest.
Go slow on buying for baby
Most experienced parents will tell you that the most common mistake that parents make is in buying things for their baby that end up being used very little if at all. Kids grow very rapidly and outgrow everything — clothes, toys, interests, and behaviors. For the first several months, they really do not need anything out of the everyday to stay engaged. Avoid buying large toys, electrical or mechanical gadgets, items that will add to clutter, and items that can be dangerous to the little one. Remember that all that looks clever need not necessarily be useful – this one is especially for the would-be dads – so avoid those clever baby contraptions that catch your eye when you go shopping with your partner.
Plan for Junior’s expenses
Your little one depends on you for food, clothing, shelter and emotional succor. That includes diapers, formula if you are not breastfeeding, and new clothes every few weeks. As the years go, you will also be providing for education, health, gadgets and self-actualization. Start planning, investing and insuring as early as possible, even if what you can do doesn’t look like much. Over time, every little bit will add up.
End-of-life planning seems like an odd thing to do when you have just started a family, but two other important tasks during these years are insurance and a will or testament that clearly states what happens to your assets and things in the event of your death. Insure yourself, your partner and junior. Insure your assets and loans if possible and update your health insurance to include the baby. You will want your loved ones to be secure in case anything happens to you and these are essential steps. Once you have got over the initial rush of celebrations and have a grip on your time, attend to this.
Use this information and other tools available to optimize your finances right away. Plan ahead for your little one’s arrival and enjoy the wonders of these months and years. Hope you benefited from this post. If you have any queries or are an already-seasoned financial parent, let us hear about it in a comment.
Subhorup Dasgupta is a Hyderabad-based writer and artist. His writing on frugality and responsible living stresses the need to understand, simplify and organize money as a crucial step towards a happier life. He blogs at Subho’s Jejune Diet.