You are now ready to become parents. Congratulations! As you prepare for this next phase in your life together, you must take time to look at the impact it will have on your finances. First, reassess your budget. You will have to buy a lot of equipment before, or soon after, your baby arrives. While some items will likely be purchased by family and friends as gifts, you will have to plan on a significant, one time expense to cover the missing necessities. There are also ongoing expenses to be entered into your monthly budget, such as formula, diapers, clothing, child care and increased health care costs. You may also wish to move to a larger home, which will increase housing and utility costs.
There are other matters to consider as well. Will one of you be staying home while the other works? When you look closely at the costs of day care, higher taxes, and commuting and other work-related expenses, a second income may not bring the financial benefits you think. Do you need more or better insurance? Make sure your health benefits will adequately cover birth and pediatric expenses. Now is the time to look into life insurance, or review the coverage you already have, to make sure it will protect your family’s financial security if something unexpected happens to you. You also want to update your estate plan, and your wills, designate a guardian in case you and your spouse should die at the same time, and perhaps set up a trust for your child, with trustees separate from the suggested guardians. Then there is saving for your child’s college education.
There are many financial opportunities to consider when you begin enlarging your family. The office of Deborah J Kent can help you sort through the options and attend to the details, while you focus your time and energy on preparing for the new arrival.