First, allow us to congratulate you on welcoming your first child into your loving home. The next point to address is: are you financially prepared to receive this child? Raising a child in the United States for the next 18 years will cost close to 200 thousand dollars (50 thousand more than in the 1960’s). The birthing costs alone can be 10 thousand dollars, and you can expect to pay another 20 thousand dollars for specialized baby furniture, diapers, clothing, and day care expenses.
A few other financial matters that should be considered as your family grows include:
It is vitally important, that your current health insurance includes coverage for your child. If not, your current health insurance plan needs to be modified according. Yes, premium payments will more than likely increase, but the peace of mind knowing you have a quality health insurance plan in place is a true blessing, when the need arises to use it. Health insurance allows all family members to be protected in a way that would be extremely difficult with any other type of financial coverage.
Life insurance and disability insurance paperwork are important documents that should be established and/or updated. Renters’ agreements, homeowners and auto policies should also be reviewed and updated accordingly.
Establishing (or updating) a Will
When it comes to children, a Will is not only in place, to establish inheritance rights and distribute assets– but also to name a guardian for your children. If a Will is not in place, to name a person to care for your child (children), in the even that both parents become deceased, then this decision falls on the courts, and may not reflect your desires for the care of your offspring.
Other financial matters to consider are, whether or not you plan to continue working after the child arrives. If childcare meets or exceeds your current income, then you may consider staying home and raising your child, in lieu of paying childcare services.
Having a child will certainly change a person’s life in more ways than one, but I am specifically speaking about adding more money to the household. For example, you may reconsider spending $5 a day on a double latte with fat-free foam.
Ladies night out may have to change to working a part-time job, to generate more income to account for the additional “mouth to feed”. Cooking more at home may also be a lifestyle change that may take some getting used to. Whatever you buy from here on out should be paid with cash only, and credit cards should be put away for true emergencies only (not used for everyday purchases).
The months prior to baby’s arrival will more than likely feel like a whirlwind of never ending activities, but if you take the time to prepare financially for your new bundle of joy, then you can have the peace of mind that all financial matters are in place, so you can better focus on your new family member.