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Townhall
Finance
Baby
on the Way: Are You Ready for
Your New Financial Reality?
By Carrie Schwab Pomerantz
May 23, 2013
Dear
Carrie, We're expecting our
first child soon, and there's so much to think about! Everyone tells us
to
start saving for college right away, but that's so far in the future.
What
about now? What should we focus on first? --A Reader
Dear
Reader, You're definitely
right that there's a lot to think about when you're expecting a baby.
(I know
from experience!) Cribs and car seats are only the beginning. And while
you're
immersed in handling the new physical and emotional responsibilities,
it's easy
for some financial essentials to get lost in the flurry. But as you're
well
aware, kids cost money, and you need to be prepared. So here are some
things to
think about now -- before time becomes an even more precious commodity!
BEFORE
THE BABY COMES
From
everyday budgeting to ongoing
expenses, before the baby comes is the time to do some planning. So sit
down
together and put some things on paper.
Review
your monthly spending. You
may be getting along just fine on your current income, but soon you'll
have a
whole new set of expenses. Basics such as diapers, formula and baby
clothes add
up quickly. If both of you plan to work, childcare can really take a
bite out
of your paycheck. Medical costs are bound to go up, both in insurance
premiums
and out-of-pocket costs. If you have to cut back, decide in advance how
you're
going to do it. Can you save a bit more before the baby's born? So much
the
better.
Make
sure you have the right
insurance coverage.
Health
insurance is crucial.
Whether you have an individual policy or insurance through an employer,
make
sure you have the best combination of deductibles and coverage. You'll
also
want to consider life insurance. Get enough to cover your mortgage,
debts and
provide for your child's education. Term life insurance policies can be
quite
reasonable. Some employers offer life insurance through the company, so
check
to see what your company offers. You may also want to look into
disability
insurance to cover your income in case you become ill.
Create
an estate plan to protect
your child.
An
estate plan isn't only about
money. It's also about making sure you designate someone to care for
your
children if you're unable. At the very least, have a will in which you
name a
guardian for your minor kids. Without it, the state can choose a
guardian.
Don't let someone else make this important decision…
Read
the rest of the article at
Townhall Finance
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