This month we have a guest author named Janice Russell. She believes the only way to survive parenthood is to find the humor in it. Ms Russell created Parenting Disasters so that parents would have a go-to resource whenever they needed a laugh, but also to show parents they aren’t alone.
If you’re a parent to a new baby, you have a lot of things on your mind, and managing your finances is probably one of them. There are a number of things to prioritize as you start this next chapter of life.
Get Healthcare Insurance
If you don’t already have healthcare insurance, now is the time to get it. You can shop affordable options through online marketplaces, or you may have coverage through an employer. Young children need regular pediatric visits and well-care checks during their first weeks and months of life, and kids are notorious for things like recurring earaches and sinus infections. A comprehensive insurance plan will cover these, as well as give you peace of mind in the event your child needs specialized medical care.
Obtain Life Insurance
If you’re a single parent, it’s absolutely essential that you have life insurance coverage. This will provide your child with a financial cushion, and can be a major help for whomever you designate as your child’s guardian. According to Guardian Life, a professional insurance agent can help you determine the right amount of life insurance that you need based on your age and other factors. Also look into what types of insurance – like disability – are available through your employer.
Establish A Will
Even though it’s hard to think about, it’s essential that you have a will that outlines your bequests and guardianship directives for your child. Meet with an estate planning attorney to get a feel for the different financial and legal documents you need to file. You may want a living will, someone to designate as your power of attorney, advanced directives for your own medical care, or even a trust for your child. Parents.com notes that a good attorney will help you understand the different areas of legal and financial protection you can and should take for your child.
Plan to Buy a House
Many new parents realize it’s time to buy a house or that buying their first home is the next big step. If you think purchasing a home is in your near future, you should follow some important steps when looking to buy, such as determining how much you can realistically afford, getting pre-approved for a loan, finding a real estate agent, and searching for homes online. The first step is keeping an eye on the housing market, so you know how much you need to set aside for budgeting purposes.
Start A College Fund
It’s never too early to start saving for a child’s college education. There are a number of different options to choose from, each of which has its own pros and cons. You might even encourage friends and family to contribute to your child’s college fund on occasion. A financial advisor can educate you about the best approaches based on your current financial picture and your earning potential. If you plan to have more children, you can also develop a savings strategy with that in mind.
Start A Business
Many parents find they feel a new sense of purpose when they become a parent, and want to have a greater degree of control over their schedules and their finances. Starting a business of your own is one way to do that. Entrepreneurship can give you more freedom and flexibility, help you save time associated with an office commute, and help you reduce childcare costs. The first step is forming a limited liability company, or LLC. This protects you from some kinds of liability and provides greater flexibility. You can avoid hefty legal fees by doing the legwork yourself or utilizing an online formation service. Laws around LLC formation vary from one state to another, so learn yours in advance.
Plan For Retirement
Even though you’re likely years away from retirement, the more planning and investing you do as a young person, the better you and your child will be financially in the long run. If you have a retirement system or plan through your employer, meet with a representative to evaluate your portfolio and your contributions. They can advise on how to maximize contributions and make prudent moves that will have a positive impact on your retirement portfolio.
When you become a new parent, you start re-evaluating all of your personal, professional and financial priorities. There’s no better time to sit down and create a comprehensive strategy for how you’d like to meet all of your goals over the short and long term.