We don’t have to tell you that starting or growing a family is the one of the most important things a person can do in their lifetime.
And once you’ve made the decision to have a baby or adopt, you’re going to turn to just about any resource (family, friends, books, the web) for advice and guidance. But someone you might not think to have a discussion with is your accountant.
Bringing a new baby into the family is more than enough to handle without the financial surprises that come with it. But addressing the financial aspects of a growing family is just as important as making sure your child is clothed and educated.
Plan A New Budget
The new expenses that come with growing your family could go on and on. But that’s why it’s important to create a new budget with the future in mind. Do your research on the additional fixed costs that come with having a baby, which includes daycare, clothes, diapers, formula, food, medical costs, etc. In all honesty, your baby budget could be pretty extensive, and you might need some help developing and revising it. But your accountant can help you work all of these new items into your monthly budget and figure out what’s realistic for you.
Create An Education Fund
It’s never too early to save for high school and college tuition. You might not even be at Step 1 yet, but you’ve still got to make education a priority if you plan on having a baby because the cost of private school and college will continue to increase year-to-year. There’s more than one way to save for your child’s education, so talk to your accountant about the most realistic one for your budget.
Insurance plays a major role in every family member’s life. And when you’re growing your family, it’s important to reassess your insurance needs before they’re actually needed. Take the time to review your current health insurance coverage, life insurance policy, and consider long-term disability insurance. Each of these could play an important role in taking care of your family in the event that something happens to you. This is going to involve brokers and maybe even attorneys, but your accountant can help you understand the financial strategy in investing in insurance.
These are three very specific areas of focus for your new family plan, but the most important pieces of wisdom for being financially smart about starting a new family are:
- Be adaptable
- Look long-term
- Build a cash cushion
- Adjust your lifestyle
It’s all about being smart about the future. And when in doubt, call your accountant.