7 Tips for Financial planning when expecting a baby
Whether it’s your first or third baby, the arrival of a new baby is always overwhelming…
It is a cycle of feedings, diaper changes, and Googling “Is it normal for a baby to (fill in the blank)” during the first few weeks.
Do your future, sleep-deprived self a favor and have a start Financial planning and adjusting to new expenses. This will ensure you are less stressed and confident in taking care of your new arrival.
The following points should be taken into consideration:
Depending on the situation, determine the cost by choosing your doctors and hospitals wisely. It should be within your budget but also provide quality Healthcare.
For example ensure your hospital has neonatal and incubation facilities, if not another hospital nearby has just incase.
2. Health insurance
Ensure your health insurance is sufficient to cater for all expenses. That is it covers the mother and baby incase of emergencies not just normal delivery.
Also confirm that your doctor is part of the preferred panel of the insurance you choose.
If you opt for a private doctor, ensure you negotiate the rates for normal and caesarean procedure before you go in. Don’t assume they will be cleared by the insurance company.
3. Family budget
The family budget will increase with the new Comer. Diapers, formula, tiny cute clothes were not in the budget. Even if there was a sibling before the new baby will still require some new things.
For new mothers there will be additional mouths as you may need to employ a nanny to help with the house work.
4. Emergency fund
An emergency fund is even more essential now with an additional baby in the home.
The monthly expenses have increased, if you already had a emergency fund it will need a top-up and if you didn’t have one you need to have at least 3 to 6 months of your monthly expenses saved in an interest earning account.
Money markets are good for this because they are easy to access and you beat inflation with the interest.
5. Life insurance
Now that you have someone who fully depends on your income, you must have life insurance that will ensure they are taken care of when you are there or not.
If you fall ill or have an accident that makes you unable to provide for your dependents. You will have a safety net to ensure your loved ones can move on without changing their lifestyle.
6. Education policy
Education is a right for your children. Since you would like your child to succeed, planning for the best schools early is important.
It’s never too early to start saving for good education.
If you start saving early, you earn better benefits.
7. Financial planning for your retirement and write a Will
Your child’s income should not be your retirement plan. The days of getting children so that they take care of you in later days are long gone.
You don’t want your child to put off opportunities that would grow them because they have a burden to take care of you after you retire.
Writing a will is a very emotional. Task which most of us don’t dare into. Many appoint Godparents for church purposes but don’t appoint guardians for their children.
Start your generational wealth creation for your family and create a legacy. Take advantage of a family trust for your family.
Proper Planning prevents poor performance should be a mantra we should have while thinking of financial independence and wealth creations.
It is also a great confidence booster when you have your finances in order. As you prepare for the expected baby, also prepare for the unexpected.