While today’s economy continues to put extra stress on most Indians ‘ wallets, those preparing to welcome a new child into the family experience the added pressure of a whole new set of expenses. From diapers to baby furniture and daycare, the costs for new parents mount quickly.
For some, the reality of these expenses is daunting.
Others are completely unaware of how the joy of a new child will impact their financial situation. So, just how much does a baby cost? The answer depends on many factors. Does one parent stay at home or does the family hire a child care provider?
Start early. During your pregnancy:
Take the time to determine your family’s immediate financial needs as well as your long-term goals.
If you have a spouse or partner, you’ll want to establish “a regular schedule for meeting to discuss your goals and evaluate your progress,” Make sure you are on the same page about what you are doing and how you want to do things going forward.”
Many new parents feel torn between competing goals, such as saving for college, retirement and a down payment on a house.
Create a realistic budget:
Determine the true cost of what you will need and weigh it against the new realities of your household income situation. This is particularly important if you plan on leaving the workforce for an extended period of time. Consult another new parent for a list of monthly baby expenses to get a clear picture of those costs.
Start and/or increase an emergency fund:
The chances of unexpected expenses will become much greater once the little one comes on the scene.New mother expectant parents should establish an emergency fund of three to six months’ worth of living expenses.
The fund will come in handy if, for instance, there are unforeseen medical costs not covered by insurance or if the new mom must stay out of work longer than anticipated due to health-related complications.
Get protection through proper insurance:
It’s time to face your own mortality and vulnerability. Protection is critical. Consult with a financial representative to ensure your health, property, income and life through appropriate insurance. In addition, consider a juvenile life insurance policy when your child is born.
Also, be sure to update the beneficiary designation on your own policies once the baby is born.
Save for college:
Before you know it your child will leave the nest, so start saving for junior’s college experience now. A financial professional can assist with the various investment tools available today for college savings. Furthermore, opening a savings account in the child’s name is a great starting point for depositing monetary gifts given to the child. Supporting a family is hard work.
Having the knowledge and tools you need to help ensure your financial stability will make the journey less complicated and even more rewarding.