When you welcome a new baby into your family, you gain new financial responsibilities. You will need to be prepared for future costs that you likely never thought much about before. After bringing your bundle of joy home, take these steps to secure your family’s finances.
Set Up a College Fund
You want the best future for your child — including a college education with as little debt as possible. Get started with a 529 college savings plan, which allows you to set aside tax-free dollars for your child’s college tuition. You can invest the money, just like a retirement fund, so the savings grow as your child grows.
Review Your Insurance
Having a baby may have caused updates and renovations around your home. Contact Richland-Knowles Agency if you have any questions about how your insurance might need to adjust.
Set Up a Dependent Care Flexible Spending Account
If your employer offers a dependent care Flexible Spending Account (FSA), you can use it to set aside tax-free dollars for childcare. But make sure to do the math before you enroll, because contributing to a dependent care FSA can affect your ability to take the childcare tax credit. A financial advisor can help you decide which savings option is right for you.
Re-Set Your Budget
Babies may be small, but they have a huge impact on your budget. You will need to create a new budget for your family that includes:
- Formula (if not breastfeeding exclusively)
- Baby food or extra groceries after your child starts eating solid food
- Books and toys
- Childcare costs, such as diapers
- New clothes every few months
- Assorted baby-related gear, such as car seats and strollers
You should also have an emergency fund ready for unexpected expenses, such as changes in childcare costs, illnesses, or injuries.
Make a Will
A will ensures that all your assets, from properties to retirement funds, go to the people you specify. It should also outline who will have custody of your child and if your assets should be handled by that person or placed into a trust for your child. An estate lawyer can help you create a comprehensive will that protects your child legally and financially.
Richland-Knowles Insurance Agency is Here for You
New parenthood comes with a lot of rewards and challenges. By taking these financial steps, you can focus on the precious moments instead of worrying about your child’s financial future. Give us a call at 908-273-7100 or email us at Information@RichlandKnowles.com if you have any questions.