It's only natural if you find that the idea of becoming a parent is a frightening yet awesome responsibility. However, if you know the steps to take to ensure that your precious little one is protected as much as possible, you'll breathe easier.
That's not to say you won't still worry about all that parenthood entails, but planning ahead will allow you to smile more and enjoy all the good times.
First Steps to Take
It will be a while before your new arrival is taking the first steps of his or her own, but you should lay the groundwork well before the due date. There are lots of checklists available to remind you of the recommended steps. Arrangements for pre and post-natal and plans for the actual delivery, as well as budget worries, will keep you on your toes for at least a few months. And if you need help creating a budget, here’s a great place to start.
But, after that, what can you do to start planning for a well-financed future for your little one? Here are some ideas that you'll want to consider:
Update (or Make) a Will
Unfortunately, things happen. If you don't have a valid will, make it a priority. Even if your savings account is slim at the present time, a will establishes your wishes and provides protection for your child. Do not put it off, even if you have family or friends who already know your desires.
Establish (or add to) a Rainy Day Fund
If you don't have a "Piggy Bank," now is the time to get one. This should not replace your normal savings plan. A supplemental fund that allows you some cash to use in any way you choose -- for emergencies, for private preschool, for a family vacation, is a bonus. If you don't need to access the money, at some point you will be able to decide how you want to spend it. Let it build until you're comfortable with the dollar amount; most financial planners advise three to six months of normal living expenses.
Take Care of the "Necessities"
As soon as possible after the birth, take care of necessary paperwork. Order certified copies of the birth certificate, apply for your child's Social Security Number, add your baby to your health insurance plan, and consider a term life insurance policy for your newborn. Don't let that thought turn you off; the cost is negligible, and in some cases, the policy that costs you pennies for an infant can mean substantial financial benefit for a growing child or a young adult. Talk to a reputable and knowledgeable insurance agent.
Look at All Savings Options
Now is the time to get serious about all your options: savings, retirement and disability accounts take on more importance when you have a child. Plan with your financial advisors for all contingencies. Establish a separate fund, no matter how small it is in the beginning, for your child's education. Update beneficiaries on all your financial accounts. As your child grows, consider establishing joint accounts that will be beneficial for both generations.
Most importantly, think of the upcoming addition to your family as a gift. Financial considerations are important, but they are not the most important aspect of parenthood!
If you have questions on setting up savings accounts for your newborn or updating your current accounts, stop by or give us a call at 248-322-9800 extension 5.
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