This is a challenging concept indeed. First-time parents struggle to manage their funds once a child comes into the equation. To be fair, it’s kind of a shock to the system, financially.
You don’t consider how much it actually takes to save and spend money on a completely new person. You’re used to being self-sufficient.
That’s why we’ve decided to provide new parents with some helpful tips. We want to make sure you have what you need to care for you child and start saving for their future. It’s easier than you may think.
Money Advice for New Parents
You should start by securing the future for your child, no matter what happens. The top three things you need to do for the future is starting a 529 educational savings plan, updating your will(s), and setting up a trust.
These items might seem scary to younger parents but you can actually start these savings plans with relatively little money in the bank. Most of the let you put away what you can afford on a monthly basis. You need to do some research to find the providers that work for you, though.
You can use a dependent-care flexible spending account to allocate some of your pre-tax dollars. Your money would go to childcare programs and save up to 30% things like preschool, summer camps, and expensive items of that nature.
Next, take a look at the insurance you have and decide if it will be suitable for your newborn child. Paying more for premiums is nothing compared to some out-of-pocket expenses for emergencies.
Another way to prepare parents for the future is having them prepare their children for the future as well. Like it or not, when you children reach the age where they can use a credit card, they usually have to pay for the mess-ups. If you start teaching your child about financial responsibility at an early age, you can save yourself a lot of heartaches.
Taking care of a child as a new parent is never easy but it doesn’t have to financially cripple you if you take the necessary precautions.