How to get your finances in order while expecting a baby
If you are expecting, it is very easy to get caught up in the excitement and joy of growing your family. You might be spending more time deciding about baby names, splurging on baby clothing, or planning the perfect arrival party. But are you giving some time to getting your finances in order?
Remember, it is never too early to think about money. Even if you or your partner is in the first month of pregnancy, it is always the right time to think about getting your finances in order. The following tips as recommended by our Trust Life advisors can help.
Create a budget for baby equipment
Babies are small. But they do require a lot of things capable of giving you a price shock. To make sure you can buy everything you need without pushing yourself, create a budget for baby items.
Remember to take everything into account, including bottle brushes, pacifiers and other small items that are easy to forget. Identify how much you can afford to spend on each item so you don’t run out of money before your baby arrives.
Create a post-baby budget
A single pack of diapers or a jar of formula may not be as expensive as a crib. But since you have to buy them regularly, the costs add up.
Prepare for those extra expenses by creating a post-baby budget.
Create an emergency fund
When you have a child who is dependent on you, it becomes even more important to prepare for emergencies.
One of the best ways to do this is to set aside a portion of your monthly income in an emergency fund. Specifically, try to have funds that can cover 3-6 months of your daily expenses.
You might not need the money anytime soon. But if your partner loses your job while you’re still on leave, having an emergency fund can save you from a financial crisis.
Start Thinking About Child Care
If you and your partner are currently working, you will need to think about how you are going to cover childcare responsibilities. Will either of you stay at home after your parental leave ends? Or will you pay for child care?
You don’t need to take a confirmed call now. But since child care is a major expense, you should start the conversation with your partner early on.
Write or update your will
Welcoming a new addition to your family is supposed to be a happy time in your life. You might not want to think about the possibility that you or your partner may not live long enough to see your bundle of joy grow.
However, if something unexpected happens, you’ll want to know that there is someone there to take care of your child and cover his or her expenses into adulthood even in your absence.
Purchase a life insurance policy
It is especially common for people to purchase life insurance when they are expecting a baby. Why? Because the purpose of life insurance is to protect the people in your life who depend on you financially in the event of premature death. And when you have a child, you are sure to have at least one person financially dependent on you.
While there are many types of life insurance you can purchase, term life insurance is the best choice for most families. The younger you are, the better it is.
Term Life Insurance is the most affordable of all policies and can be easily purchased online. A $500,000 coverage starts from just $22/month. To find out your price, get in touch our financial advisors. We can provide you with the best and affordable life insurance plans in Brampton, Hamilton, Toronto, and Mississauga.
So that’s basically it. Heartiest congratulations on becoming a to-be parent! Be responsible and financially sensible and you will see things ease up a lot in the long run.