3 Financial Planning Essentials Every New Parent Needs
If you’re expecting a new baby, you may be anticipating all the ways your life will change. Becoming a parent really does change everything and that can include your financial plan. So, if it’s been a while since you’ve taken a good look at your finances, here are some basic moves you need to make to ensure that your family has a stable financial future.
You Need a Solid Estate Plan
When you become a parent, there’s a certain level of joy that kicks in, but there can also be a huge amount of fear. Not knowing what the future will hold for you and your new family can cause those fears to overshadow the positive feelings of becoming a new parent. That is why you should take the proper precautions to ensure that your family is financially protected no matter what happens in the near or distant future.
You can get started by researching life insurance online and figuring out how much coverage you would need to keep your family comfortable, should the unthinkable happen before your child grows up. Online calculators can make determining your life insurance needs really simple and you can even purchase your policy online, for added convenience. Now, to make sure that your life insurance policy is properly used to provide for your child and partner, you will also need to map out an estate plan. For parents, this means drafting a will that dictates how insurance payouts and other financial assets will be distributed. It also means using that will to appoint legal guardians to provide care for your little one.
You Also Need a Retirement Plan
You may be wondering why on earth you should be thinking about retirement when you are planning for your new baby? Well if you want to remain financially stable throughout your golden years, you have to start planning and saving for retirement much earlier than you would think. If you do not take the time to figure out your plans for a solid financial retirement now, you could end up struggling to make ends meet when you are a senior. Not to mention that when parents fail to save enough for retirement, their kids are the ones who end up providing financial help.
If you want to preserve your quality of life and spare your children from stress, you definitely need to start thinking about this part of the distant future. If you are puzzling over how to save for retirement when you are also paying for new baby expenses, you may actually be in luck. Because recent retirement reports show that adults with children may be able to get away with saving much less, and they may also be able to stretch those retirement dollars further. That’s because parents tend to be more frugal and savings-savvy with their budget.
You Will Need Budgeting Tools Too
Creating plans for your estate and your retirement should always be top financial tasks. Parents should also plan for savings that will prevent emergencies from rocking their family’s finances, but it can help to have tools that make achieving all of these financial goals less stressful and time-consuming. If you have some room in your budget and you have considerable financial concerns, your best tool for achieving financial freedom may be to hire a financial planner. This can be an expensive step though and it’s one that many new parents may not be able to afford.
If you want to cut costs and still keep your finances on track, you should start researching apps and online tools that can provide the support you need. Budgeting apps can be a lifesaver when you are adjusting to the added expenses of caring for a new baby but if you want to boost your savings, you can also use automated savings apps to start padding your family’s nest egg.
Finding ways to reduce stress and anxiety is important for new parents. By creating a basic financial plan, you may be able to lessen your worries around becoming a parent. Plus, you can ensure care and stability for your family well into the future.
Guest Writer: Sara Bailey