When you have a little one on the way, there is always much preparation to be done. You have to buy diapers, and assemble the crib, and learn how to properly install a car seat. And of course, there are financial plans to make, as well. In fact, financial advisors and estate planning lawyers advise that you pause to get all your monetary affairs in order before your bundle of joy arrives.
What are some of the financial moves you should be making before the baby’s arrival, though? Here are a few recommendations.
It’s always important to make sure you’re living within your means—and that means developing a smart budget and then sticking to it.
Start by doing a rundown of your current cash flow; that will help you see how much wiggle room you have for the new baby expenses. And if you fear that things are too tight, don’t panic. Your lifestyle is definitely going to change a little bit post-baby, and there are plenty of little adjustments you can make to your monthly spending (e.g., probably fewer meals out, fewer concert tickets purchased, etc., all of which can balance out the cost of diapers and supplies).
Speaking of diapers, there are going to be some expenses associated with having your baby. One of the big ones is the actual hospital bill, which can be quite a lot or quite a little, just depending on your health insurance.
Another big cost is child care. Unless one parent is going to be staying at home full-time, you’ll need to find someone to watch your little one during the work day—and that can add up!
As you plan these future expenses, also take into account any lost wages during maternity or paternity leave. (To that end, we definitely recommend sitting down with your company’s HR representative to review the resources available to you.)
It is also a smart idea to get your estate plan in order before the little one arrives.
There are a variety of reasons for this, and foremost is the fact that your estate plan is where you will name the person who will raise your child should you and your spouse both die unexpectedly. This is not a pleasant topic, but it’s important to be prepared for anything—for the baby’s sake. Make sure your will names the person you wish to be guardian of your child.
Something else that’s important is to make sure there are financial resources left to your surviving spouse and/or the guardian of your child, ensuring they have the means to raise your child. Again, a will is important, and trusts can also play a role. Consider life insurance, as well.
Finally, estate planning allows you to denote your wishes should you become incapacitated somehow. It’s always a good idea for you to lay out your wishes—again, just to be on the safe side, and to make sure all your bases are covered.
The pending arrival of a new baby always brings with it a flurry of activity. Make sure that, even in this joyous season, you pause to consider your finances—including your estate plan.
If you need assistance developing or updating an estate plan, reach out to our team. We would love to help you get everything ready for your big addition. Make an appointment with the estate planning experts at Singh Law Firm by contacting us today!