New parents are hit with a number of
life changes simultaneously. While most are exhilarating and exciting, others
are more practical and prudent. For example, ensuring your finances are in
order is critical for your growing family's long-term financial security. The Palmetto Queen offers the following
resources to help you lay a strong financial foundation.
Health and Life Insurance
Having health insurance is a
necessity when you have a newborn, both for wellness checks and midnight
earaches. According to Bankrate, life insurance for parents is also important,
and a specialized insurance calculator can help you determine what
you need. Many new parents opt to take out life insurance policies that would allow a surviving
parent or guardian to not only raise their child through adulthood, but pay for
college, and possibly even have a nest egg for the future.
Remember too that coverage shouldn’t
stop at health and life insurance. Making sure you have enough coverage for
your property and vehicle is also crucial. A reputable insurance agency can help you analyze the
most appropriate approach to selecting the insurance products that meet your
particular needs.
Wills and Advance Directives
Some people, especially young adults,
put off making wills, but having a will in place ensures that all of your wishes for your child, and potentially, a
surviving spouse or partner, are taken care of. A will outlines the financial
provisions of the disposition of your assets, as well as designates a guardian
for your minor children. This typically comes with an allotment of proceeds
from the estate to support the child. As part of your will, you can also make
plans for advance directives and living wills that can help a surviving spouse
or other designee make tough medical decisions in the event you are unable to make
them yourself. While planning a will when you’re just starting your family life
feels uncomfortable for some, it’s an important responsibility and will allow
you to rest assured that you’ve protected your child in the event of the
unthinkable.
Savings Plans
Young families are wise to create
household budgets that include savings plans. According to experts, it's
advisable to have at least three months of living expenses tucked away in a
savings account in the event of job loss, or other unforeseen financial
circumstances. Keeping your debt load low is also a wise move, as revolving
credit with high interest can sometimes get out of control, and become
difficult to pay down. You might also decide to open an education savings
account or a college savings plan for your child. Even adding
small amounts at a young age can help ensure your kids are well-positioned to
make their way in the world once they reach adulthood. Some parents even
request donations to the fund in lieu of gifts when their children are very
young.
Making Big Investments
Many parents realize once they have
children that it's time to purchase their first home or move up from a starter
house to something larger. If this is in your plans, it's important to
understand what your credit score looks like and what you can afford. A
seasoned real estate professional or mortgage lender can help you with these
key tasks. You'll need to save for a down payment or secure a first-time homebuyer
loan, which can often offer better terms and a lower down payment than other
mortgages. It’s helpful to get preapproved for a loan before you start
house-hunting, as sellers will recognize you’re already prepared and approved
to buy.
Boosting Your Income
After a baby arrives, it’s common for
one parent to leave work to stay at home, but this obviously presents the
potential for financial difficulties. Depending on your situation, a side job
or even launching a small home-based business can be great ways to increase
your savings and your income as a stay-at-home parent. There are plenty of business opportunities that can be fairly
lucrative, and it doesn’t take much to set up your business. A formation
service can help you formalize your business with the state, in addition to
helping you file other necessary paperwork, including registering as an LLC. If
you’re wondering, “I registered my LLC now what?” all you need to do is
market yourself and start looking for clients.
Getting your financial house in order
is an important step as new parents. You're no longer just responsible for
yourself and your spouse or partner, but for another being who is completely
reliant on you. Use these tips to pave the way for a brighter future for your
growing family.
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