Five financial building blocks for new parents

While today’s economy continues to put extra stress on most Americans’ wallets, those preparing to welcome a new child into the family experience the added pressure of a whole new set of expenses.

From diapers to baby furniture and daycare, the costs for new parents mount quickly. For some, the reality of these expenses is daunting. Others are completely unaware of how the joy of a new child will affect their financial situation.

So, just how much does a baby cost? The answer depends on many factors. Does one parent stay at home or does the family hire a child care provider? Will the child attend public or private school? Is there a need for a larger home or car for the growing clan? According to the U.S. Department of Agriculture, raising a child costs an average of nearly $11,000 the first year and more than $220,000 for the first 18 years.

So where do expecting and new parents start? Thrivent Financial for Lutherans offers these five building blocks to help them prepare. 

Start early. During pregnancy, take the time to determine your family’s immediate financial needs as well as your long-term goals.

Create a realistic budget. Determine the true cost of what you will need and weigh it against the new realities of your household income. This is particularly important if you plan on leaving the workforce for an extended period of time. Consult another new parent for a list of monthly baby expenses to get a clear picture of those costs.

Start and/or increase an emergency fund. The chances of unexpected expenses will become much greater once the little one comes on the scene.

Protect your family’s future through proper insurance. With a dependent, it’s time to face your own mortality and vulnerability. Consult a financial professional to insure your health, property, income and life through appropriate insurance. Also, be sure to update the beneficiary designation on your own policies once the baby is born.

Save for college. Before you know it they will leave the nest, so start saving for Junior’s college experience now. A financial professional can assist with the various investment tools available today for college savings. Furthermore, opening a savings account in the child’s name is a great starting point for depositing monetary gifts given to the child.

Supporting a family is hard work. Having the knowledge and tools you need to help ensure your financial stability will make the journey less complicated and even more rewarding.

 

Rate this article: 
No votes yet
Article category: 

Add new comment

Full HTML

  • Web page addresses and e-mail addresses turn into links automatically.
  • Use [scribd id=xx key=yy mode=zz] where xx is you scribd document_id, yy is your scribd document access_key and zz is your optional mode (scroll or slideshow) to create a link to the scribd document.
  • Lines and paragraphs break automatically.

Filtered HTML

  • Web page addresses and e-mail addresses turn into links automatically.
  • Allowed HTML tags: <a> <em> <strong> <cite> <blockquote> <code> <ul> <ol> <li> <dl> <dt> <dd>
  • Lines and paragraphs break automatically.

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
CAPTCHA
Enter the code below exactly as it appears. It is case sensative. If your comment was successful, you will see a Green Check Mark under the headline. This question is for testing whether you are a human visitor and to prevent automated spam submissions.
Image CAPTCHA
Enter the characters shown in the image.