Having a new addition to the family is life-changing, exciting and overwhelming. It is also another essential time to take a hard look at your financial goals and planning needs. Here are some of the things we recommend new parents should do to help prepare for this amazing added responsibility.
New Addition Financial Planning To-Do List:
- Re-establish financial goals to ensure both parents are on the same page.
- Determine how income will be impacted should one spouse reduce their hours at work or take time away from their career to stay at home.
- Obviously, babies come with many new expenses so update the household budget as best you can ahead of time and as these new expenses accumulate.
- Often, the biggest new expense will be childcare. Hiring a nanny or finding the right facility can take weeks or months. If both parents are planning to work after maternity/paternity leave, allow yourself months to find the right nanny or facility that you both are comfortable with.
- Understand your family health insurance coverage and anticipate costs of prenatal care, labor and delivery.
- Name a guardian and update wills and other legal documents. Let us know if you need an introduction to an estate planning attorney.
- Revisit beneficiary information on life insurance policies, 401(k)s, retirement accounts and other investment accounts.
- Review life insurance coverage.
- Start saving for future education expenses. If a private elementary or high school is a possibility, education saving will need to cover much more than just four years of college.
- Keep funding your retirement. When a child arrives, it is easy to become distracted from your long term retirement goals.
- If you haven’t already established an emergency fund, now is definitely the time!
Adding a new member to your family can be the most exciting and rewarding time of your life. This is just a tiny piece of what parents do for their children. Let us know how we can help you, your children and your grandchildren with these financial planning items.