5 Financial Moves After Having a Baby
As any new parent will tell you, having a baby is a blessing and a joyful moment to celebrate. However, there are also financial responsibilities that come with welcoming a new member into the family, which are better known earlier than later. According to the U.S. Department of Agriculture, it costs a middle-income, married couple with two children $233,610 to raise a baby born in 2015. This figure includes housing, childcare, and college savings. Therefore, it is crucial for new parents to make long-term financial plans wisely and to be aware of all the options available to assist them in saving money. Here are 5 tips to consider when planning for a baby:
1. 529 Plans — College Savings
529 plans are sponsored by the government to encourage the pursuit of higher education in the United States. They come in two forms: prepaid plans and savings plans. With prepaid plans, you can prepay future college credits at today’s credit rates in order to save money from inflation. Savings plans, on the other hand, consist of mutual funds that offer many investment options to assist you when funding your child’s college education. One of the biggest advantages of enrolling in a 529 plan is that the donor may also receive a state income tax deduction.
2. Life Insurance
While many companies offer life insurance to their employees, it is important for new parents to consider whether the life insurance offered by their employers is adequate. Moreover, your life insurance policy provided by your job can fall through if you unexpectedly become unemployed and are unable to take it over yourself. A life insurance plan will require regular payments over the course of the child’s life, so make sure to plan wisely and adopt a life insurance plan that is suitable for your family’s unique circumstances.
3. Update Your Will
Like with life insurance, it is important for parents to create or update their will to include the new child as a beneficiary as soon as the young one is born. And apart from the distribution of your property and assets, it is also advisable to appoint a guardian for the child in your will, in case of the unexpected. Picking a trusted guardian will give your child essential support and help your child plan their future well, including on a financial level.
4. Health Insurance
Additionally, remember that in order to add your baby in your health insurance coverage, you may have to do so as early as within 30 days from its birth in certain cases. Contact your healthcare provider for more information.
5. Long-Term Financial Planning
Following the above steps will get you off on the right foot when setting your child up for financial success. Also important, however, is establishing a long-term partnership with a financial institution you trust to help you every step of the way. Citizens National Bank has been faithfully serving the Sevier County community for decades, and can be the partner you need in safeguarding your child’s financial future. Contact us today to learn how we can help.