Having a baby changes everything, including the family finances. The expenses in the first year include hospital fees, diapers, formula and child care. Over the years the cost of education, medical and day to day expenses will keep on coming.
Here are some finances tips for new parents:
Create New Budgets
Most people work from a budget and when expenses change your budget will need to change too. Take into account all of your new expenses such as diapers, formula, baby clothing, toys, childcare and medical expenses. There are also some expenses that will probably reduce such as entertainment seen as your priorities will be changing when the new member of your family arrives.
Long Term Financial Planning
Parenting is a long term game and your financial planning should be too.
One of the biggest expenses you will have when you have children is education. Putting one child through pre-school, at least 12 years of school and then university or college for a few years is going to set you back.
Start making a plan for how you will pay for education and start putting money away. You can consider taking out an education plan with your bank or just put money away as often as you can.
Working out how much money you will need to educate your child will help you to plan better and will help prevent any surprises later on.
Medical costs is another expense that needs to be taken into account, even if your child is healthy you will be spending a lot of money on medical expenses. You also want to ensure that everyone in your family has medical insurance. You never know when someone will fall ill or have an accident.
Another important aspect of long term financial planning will be to start planning for your retirement early on. You don’t want to land up being a financial burden on your children in your old age.
Making sure that your children are provided for no matter what happens to you and your partner should be a priority. Make sure that you have a life insurance policy in place as soon as your children are born.
It is important for everyone to have some emergency savings, but even more so when you have children. There are many occasions where you may be without income for a while or where you have an unexpected expense that could take you for a knock.
Keeping 3 – 6 months worth of living expenses stashed for an emergency will always be beneficial for your family.
Investigate any tax benefits you are eligible for when you have children – depending on where in the world you live there may be some great tax benefits that you can apply for.
Get A Loan from Bennett Lending
There may be times where you need extra financing to make ends meet from time to time to cover an unexpected expense or perhaps to pay off a number of smaller loans to get yourself into the clear.
Do some careful research into the best type of loan that will suit your needs and make sure that you can afford the repayments.