Money Matters: Five Smart Financial Steps for New Parents | News, Sports, Jobs

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Becoming a parent changes your life, and that includes your finances. Take diapers, for example. With 120 diapers costing around $40 and newborns needing that many 12 diaper changes in a day… Well, you don’t have to be an accountant to realize your spending is taking a hit.

So, in addition to attending birthing classes and checking your pregnancy apps daily for baby updates, prepare yourself financially. Here are five basic steps:

  • Familiarize yourself with your health insurance.
  • take out life insurance.
  • Make a will.
  • Optimize your household budget.
  • Build your emergency savings fund.

There’s always more you could do, but start with these five steps to put yourself on a solid financial footing as you welcome your sweet baby into the world. Read on for details.

Familiarize yourself with your health insurance and add your baby to your plan

Wouldn’t it be nice if your health insurance company automatically added your newborn to your plan so you could focus on cuddling the newborn instead of the paperwork? Unfortunately it doesn’t work that way. Be sure to check with your insurance company or employer between diaper changes and naps! Plans usually give you 30 to 60 days after the baby is born to make changes to your plan.

It’s also important to know what maternity and baby benefits your plan covers (and doesn’t cover) so you can plan ahead.

“Even with insurance, you could still end up owing thousands of dollars for prenatal care and childbirth. On the plus side, some insurance plans cover extra benefits you might not expect, such as: B. Visits from a lactation consultant,” Jessica Sillers said moneygeek.com. “If your hospital bill is higher than expected, remember that you have the right to request an itemized bill so you can review each expense.”

Get life insurance

Having life insurance can provide you with priceless security when welcoming your child. Like other monthly premium insurance, life insurance is there to protect you and your family financially in the rare worst-case scenario.

“What a lot of people don’t realize is how affordable life insurance — particularly term life insurance — can be,” said Janet Berry-Johnson at forbes. “For young and healthy adults, term life insurance can cost less than many music or video streaming services per month and provide the financial protection your family needs should an unexpected tragedy strike.”

Term life insurance lasts for a specified period of time, usually 20 or 30 years, or is enough to cover children up to legal adulthood. These policies usually have a fixed premium.

Make a will

Updating your will or making a will is crucial for new parents. This will ensure that your money and other assets go to your child and that they are looked after by a trusted guardian should anything happen to you.

While drafting your will with an attorney, it’s also a good idea to sit down with your parents and your children’s potential legal guardians to discuss your wishes. These discussions facilitate the execution of the will if necessary.

Optimize your household budget

Caring for a baby can be quite expensive, and it’s a lot easier if you carefully review your household budget and adjust if necessary. But sometimes we make it harder than necessary!

“If it’s your first time with a new baby, you need to know a little secret: Babies don’t need much to be happy,” Sillers said. “A clean bottom, a full stomach and lots of cuddles are usually enough.”

Talk to your friends who have babies to get an idea of ​​what you do and don’t need and how you can save money. And try tools like a baby cost calculator http://babycenter.com to help you get an idea of ​​what to buy in your specific situation and how much it may end up costing.

Build your emergency savings fund

If you were faced with an unexpected medical bill, do you know how much it would cost you? Corresponding http://healthcarefinancenews.comexpect to pay “more than $1,200 for anesthetist services, $2,600 for surgical assistants, and $750 for midwifery services.”

Unexpected medical expenses or other unanticipated bills can be particularly stressful when you have a new baby to care for, and when you find yourself unemployed the stress can be overwhelming.

“That’s why it’s helpful to have an emergency fund that covers six to 12 months of living expenses in the event of a layoff or a job change,” Berry-Johnson said. “An emergency fund is especially important when your family is dependent on the income of a single family member.”

Preparing for parenthood can feel like a daunting task, especially when you consider all of the financial aspects of welcoming a new baby. Start with the basics by understanding your health insurance, getting life insurance, making a will, optimizing your household budget, and building your emergency savings fund. These steps will give you peace of mind as you embark on the exciting adventure of parenthood.



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