A new baby is an exciting addition to a family. It’s natural to focus on the immediate necessities, such as baby clothes, furniture and feeding materials; but besides those cute outfits and cuddly stuffed animals, parents may also benefit their child by planning for the future.
Besides all the materials such as baby furniture that add up, how are your monthly expenses going to increase? How much will you be spending on diapers, baby food and other supplies? You want to plan for other expenses such as day care costs and doctor visits. We wouldn’t trade our children for the world but they do add significantly add to our list of financial responsibilities.
If your budget is tight, hold off on that bedroom set until your baby can appreciate it; instead, only buy the items you need. Cut those coupons for food and diapers. One item that should be purchased early on is a life insurance policy, especially if your child is healthy. Your premiums will be reasonable. Don’t wait for a diagnosis later on that could cause a higher monthly rate.
It’s also important to look way ahead into the future. College is becoming more expensive each year. While new legislation aims to reduce education costs, parents who create a college fund now may be in a better position to help their children with tuition expenses, reports the Kansas Star.
Purchasing a life insurance policy or including the new baby in existing coverage is a good way to ensure the child will be financially cared for if the worst should happen, the newspaper reports. Proceeds from a life insurance policy can help survivors maintain sufficient income or set up a trust for beneficiaries.
The Massachusetts Office of Consumer Affairs and Business Regulation and the Massachusetts Division of Insurance says that in addition to updating financial information, new parents should also make sure they fully understand their coverage.
Parents should make sure their wills are updated to name the guardian of a child or the custodian of any assets left to minors.
Parents want the best for their children and planning for the unexpected is a good way to ensure they will be cared for. Maintaining health, life insurance and college accounts will help provide for a child’s medical and financial well-being.