photo credit: paul goyette
Planning to have a baby entails a lot of preparation. A major part of the preparation should involve financial planning. The parents to be may want to ask the following questions:
1. Do we have the budget for a new baby?
Budgeting for a new baby means getting prepared financially. This will make financial decisions clear and easy to handle and may save the parents a bundle in the long run. After all, a budget means allocating money for some specific purpose. Therefore, no budget means no money, no purchase and end of plans.
2. What are the things needed and how much do they cost?
Parents are advice to make a list of the things they will need to purchase. Parents need to be careful with their money now as having a baby means on-going expenses for many years to come. The budget above should help to set limits and hence it is important not to waste money on unimportant things.
3. Does one spouse has to stop working to stay home? Can the family survive on one income?
This is a major decision and parents should list down all the pros and cons. The loss of one income means the budget may be insufficient to meet the family’s needs.
4. If both parents plan to work, what is the child-care cost?
If both parents are working, there is a high chance that the baby will be sent to a child-care center. Investigate the cost of doing so and include it in the plan budget.
5. Do you need to consider increasing your life insurance to protect against potential loss of income? Will planning may also be necessary.
In order to protect your child’s future, the parents have to obtain life and disability insurance. If something happens to the income earner, the insurance helps to replace part of the loss of income. Drawing up a Will ensures your child will be taken care off by someone you trust (the appointed guardian). All these go to protect your child’s future.
Do you have other suggestions to include with the above? Please share your comments.
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Interesting and indeed very true. I found your blog very informative and helpful. Thanks for the sharing.
Thank you Yan! I hope you will continue to enjoy the blog. I look forward to your continuous input.
These are lovely ideas to be thought through by parents-to-be. The real trick to dealing with budgeting for a child is PLANNING. This area is where it is critical to know your goals and what’s important to you. You will be able to facilitate your decision-making much more easily! With advanced planning, you will be able to relax with all of the “new” money you will spend with a child because you will already know what is okay.
Hi Kristin, you are absolutely right about the planning part
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