Looking forward to becoming a first-time parent? Congratulations! There are probably a million things you are trying or planning to do to prepare for the baby to arrive. But among the most important are to make some financial planning preparations.
Rather than stress yourself out by trying to handle them all at the last moment, here's a handy checklist for the last 6 months of your pregnancy.
Month 1: Contribute to Savings
Before planning long-term goals, college savings or moving, assess your current finances and determine the state of your savings. Two savings goals are vital to a young family: short-term savings and regular retirement savings.
Short-term savings is for emergencies and is often recommended to be between 3 and 6 months' worth of expenses. And while most parents agree on the need to save for emergencies, less agree on the need to save (or increase savings) for retirement. But planning your own future helps you be able to ensure your child's as well.
Month 2: Write a Will
Every parent needs a will. And yet many people still don't have one. Buck this trend by meeting with a lawyer to set up a proper will before your baby arrives. This will should specify who will control your assets and care for your child. It may also be a good idea to determine if you need to set up a trust or name a temporary guardian as well.
Month 3: Decide About Goals
Becoming parents for the first time is a life-altering event. It's also time to make sure both of you are on the same pages as far as financial goals like whether or not to change housing, set up college savings and alter work schedules. Month 3 is a good time to hammer out your overall financial plans, decide on priorities and meet with a financial planner about how to reach them.
Month 4: De-Clutter Your Finances
You will have enough to worry about without adding confusing financial matters to the mix. Take the time to simplify your finances so you know where everything is going, who you owe and when it's all due.
What can you do to simplify? Pay off small debts so you don't get late fees. Consolidate old IRAs or 401k balances. Bundle ongoing payments like insurance coverage or utilities. Cancel unneeded subscriptions. Make use of automatic payment options through your bank to ensure bills are paid on time even when you don't have the energy to remember them.
Month 5: Research Work Benefits
Now that your due date is getting closer, it's time to meet with Human Resources in each parent's workplace to go over potential benefits like flexible spending plans, life or accident insurance and maternity compensation. Investigate the costs of adding the baby and/or the other parent on a health insurance plan. Choose benefits and complete the paperwork before your pregnancy makes it difficult to get done.
Month 6: Get Life Insurance
If your employer doesn't offer it, make sure you research and purchase life insurance. Which type of policy to buy and how much is right for you will depend on factors like how much debt you have, what income you bring in and whether you're the primary breadwinner. Your accountant or financial planner may be able to help you determine the correct coverage amount. But, whether it's a little or a lot, life insurance could be a life saver for your new family if something happens to either parent.
By following these steps, you can approach your new arrival with less trepidation and more confidence – knowing that you're prepared and ready to meet the financial challenges ahead. For more information, contact Global Wealth Consultants LLC or a similar company.