Summary
This blog details 10 essential financial measures for soon-to-be parents to prepare for their upcoming family expansion. It highlights the importance of budgeting for baby-related expenses, assessing insurance policies, and establishing an emergency fund. It also advises on adjusting tax withholdings, investigating parental leave options, and saving for future education expenses. Additionally, it recommends addressing wills, making informed baby gear purchases, exploring childcare choices, and seeking professional financial advice. These actions are aimed at equipping parents to confidently manage their family's financial well-being during this significant life transition.
Congratulations on your next chapter and new addition to the family! As you prepare for the arrival of your little one, it’s essential to ensure your financial house is in order. Improving your money management skills and making smart money moves is more important than ever.
The Brookings Institution estimates that raising a child born in 2015 into maturity (17 years old) will cost, after adjusted inflation, an average of $310,605. That’s a major investment to be prepared for!
Fortunately, OneUnited Bank always has you covered. First, dive into our article with practical and fun tips on how to set your financial future on the right path when you’re expecting. Then, embrace a brighter financial future with our OneLove™ Card, a symbol of our commitment to fostering unity, love, and empowerment within our communities.
1. Create a Baby Budget
Start early by forecasting all the anticipated expenses related to your little ones, such as medical costs, baby gear, and ongoing childcare. Tap into our suite of financial resources, including our AI-driven financial wellness tool, WiseOne Insights, to track your spending, manage your money, and multiply your finances more efficiently. You can even link all of your accounts—including external savings, checking, loan, and investment accounts—with OneUnited Bank using Money Management to view every transaction in one place and build a solid financial plan.
2. Review Your Insurance
Review your health insurance policy so you know all the little details and fully understand coverage for prenatal and postnatal care. With more family members comes more responsibilities. Look into life insurance options to help protect your family’s financial future.
3. Build an Emergency Fund
Always prepare for the unexpected. Build your emergency savings account to cover surprise costs.
4. Adjust Your Tax Withholding
Consult with a tax professional to assess if adjusting your tax withholding can put more money in your pocket throughout the year. Once your child arrives, you should immediately add a dependent to your household, which can lessen your overall tax burden.
5. Explore Parental Leave and Benefits
Review your employer’s parental leave policies and any available benefits, such as paid time off, flexible work arrangements, or employee assistance programs. Consult with your Human Resources department to understand the process for applying for parental leave and how it may impact your finances during your time away from work.
6. Plan for Higher Education
School is the gateway to opportunity. This opportunity has a high price tag. Consider opening a 529 college savings plan to start saving for your child’s future education costs. With a 529 college savings plan, you can take advantage of tax-free growth, high contribution limits, and flexible use of those saved funds towards their education.
7. Create or Update Your Will
A will is an essential way to ensure your family’s financial security. It is a legal document that sets forth your wishes regarding the distribution of your property and the care of your minor children. To understand more about a will, check out how you can make OneTransaction to build generational wealth!
8. Shop Smart for Baby Gear
New is not always in season. Resist the urge to buy brand new baby gear. There are definitely other families who would love to offload their old strollers and baby bouncers.
Look for gently used baby items, take advantage of sales and coupons, or ask around your family and neighborhood for a good deal on used gear.
9. Research Childcare Options
Childcare is a significant expense for many parents, so it’s crucial to explore the available options and budget accordingly. Investigate different childcare options and associated costs, from daycare to in-home care.
10. Seek Financial Guidance
Remember there are many who have gone through this journey before. Lean on your family, community, and friends for advice. You can even search for a financial advisor or planner who specializes in family finances to help you make a comprehensive financial plan! Get #FinanciallyLIT as you continue along your journey.
Adding a new family member is a magical and momentous occasion, but it also brings new financial responsibilities. By taking these money moves to heart, you’ll be better prepared to welcome your new family member confidently knowing that you made the right steps towards securing their financial future.
