Getting Your Finances in Order Before Having a Child
If you are expecting a child, whether biological or adopted, you likely know it can be expensive to raise one. The good news is there are several things you can do now to begin preparing for the arrival of the newest member of your family. This will ensure your finances are in order and your child is protected.
Getting Life Insurance
You should get a life insurance policy in at least six to eight times your annual salary so your new child will be covered. You might look into cash value polices, including variable, whole life, and universal, since they grow a cash value over time. However, they can be complicated, so you can also look into simpler options such as term life. If you are looking for an out to your current policy, you can look into selling your existing one for cash. If you are thinking about going this route, you can review a guide on everything you need to know about selling your policy through a life settlement.
Retiring from your job might be the last thing on your mind, especially when trying to save money with a new baby is difficult, but you should start planning now. Try to prioritize saving for retirement if you have not done so before. It’s even more important if you plan to take a few months off once your baby arrives. If you are away from work for a year or longer, you might be able to use a special account called a spousal IRA. You can often set aside a few thousand each year, deducting this from your taxable income. You can check with the IRS to learn more.
Consider Care for the Child
If there will be no stay-at-home parent, you will need to consider how your offspring will be taken care of while one or both parents are at work. You might want to start this process no later than the second trimester, before your mobility and energy start to wane. There are nonprofit organizations that keep track of the kinds of childcare available in the area. You can also compare the fees that different providers might charge. A nanny could be another option if you don’t want to go with daycare. Look over references of potential nannies and spend a bit of time checking out their qualifications. While you want to get a good deal, you also likely want only the best for your kids.
Getting Health Insurance
Now is the time to consider how you will add your new family member to your health insurance. New parents are often able to add someone up to a month after delivery happens. You will want to check with your insurance company or company or your employer’s human resources department. No matter how you go about it, you could begin filling out the enrollment information. You can leave the birth date and names blank. Try to get this to the right department as soon as the child comes home from the hospital.