Welcome to the beautiful world of parenthood. Having a newborn child is a beautiful blessing and you get to expand your family. However, children aren’t cheap or free. Therefore you and your partner may be stressed about how to best support your family now and in the future. Here are some essential tips to play the game of finance as a new parent.
Seek Financial Advice
Are you or your partner a financial professional? If not, then you likely have a lot of questions and concerns about how to handle your finances. You can seek professional advice from a number of sources. The best place to start in the game of finance is with a local accountant. An accountant doesn’t just represent rich people. They can represent people of all social classes who need their services. Your taxes already become a little more complicated if you’re married, and with the addition of a child, you now have a dependent. Therefore, you’ll have access to more deductions. Your financial consultant will advise you on the best way to save. They can help you prepare for tax breaks to benefit from as a family. If you’re a business owner who already has an accountant, they may also help you further with your personal taxes.
Some accountants may allow you to do free consultations. That way, you can ask around until you find the one who is best for your situation. Some financial consultants may meet with you over the phone or prefer in-person meetings. If someone in your inner circle uses an accountant, they may be able to give you a referral. Now, that the official tax day has passed, it may be easier to meet with an accountant or tax consultant. It’s never too early to get a head start on next year’s tax season.
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Prioritize Home Maintenance
The game of finance can be played well with your housing. While you may still be renting, home ownership is a better way to invest your money. At least when you do home maintenance on a place you own, you’re also building your equity. As you pay down your mortgage, you’ll have more equity. The more value you add to your home the more your equity will also increase. So if you’re thinking about leaving your current home to your newborn child, you want them to inherit something useful and worth something when they come of age. That’s why prioritizing such maintenance is essential to ensuring your home isn’t just a comfortable place to live, but a valuable one.
Home maintenance should focus on safety and function. After all, you don’t want anyone to trip and fall on your property, especially your little one. Asphalt paving can ensure any cracks or potholes are removed from your driveway and walkway. Roofing repairs or new installations ensure your roof can protect your structure from the elements such as leaks. If leaks continuously get into a home, it can rot your foundation and drywall. Those leaks can also breed mold, which would create a health hazard for everyone such as your baby. Don’t create an environment where your little one may develop asthma or lung infections by allowing mold to fester.
Invest in Your Health
As you can see, your home maintenance can play a role in investing in your health by preventing mold and other dangerous elements from occurring. Another way to invest in your health is with your daily practices. The game of finance involves spending money on maintaining your health, mind, and body. When it comes to your baby, you should always have nutritious food and a healthy environment, so they can hit those developmental milestones. If you don’t already have a family dentist, now is the time to get one. After all, your child should begin to make the first trip to the dentist office the minute the first tooth sprouts or by their first birthday.
In addition to proper dental care, don’t forget your trips to the doctor’s office. According to Healthline, people should get at least one annual appointment. Depending on your existing health status or chronic conditions, you may need more frequent visits. Your child will certainly need about six doctor visits in their first year for newborn care. Therefore, you should have a good family health insurance plan. In addition to health insurance, you should try to put some side money away to help cover your out-of-pocket medical expenses. In the game of finance as a new parent, you can use an HSA as a way to have tax-free health-based savings.
Plan for Childcare Costs
Don’t wait until your child is born to start planning for childcare costs. Your childcare expenses will start the minute that the child is born. The idea is to already have a nest egg building if you want to win in the game of finance. Otherwise, if you’re not careful, you may have to contact a bankruptcy attorney. Bankruptcy should ideally be the last option you consider if you no longer have a way to pay any of your bills. If you have to resort to bankruptcy, you have the option of filing Chapter 7 or Chapter 13. As a homeowner, one option does allow you to keep your home but you would have to pay your debt back a lot faster. Therefore, the minute you find out a pregnancy is real is the time to start cutting down on unnecessary expenses. Then you can become accustomed to saving. You should also ask other parents about their general childcare costs so you can start creating a budget beforehand.
Minimize Your Debt
Now that you’re a new parent, it’s very easy to pile up debt if you’re not careful. After all, your expenses will greatly increase with the addition of a new baby. If you plan on having more children in the future, your expenses will go up even more. You also have to compare your ongoing expenses with your income. Unless you get a higher-paying job immediately, then your income-to-debt ratio may increase because of existing debt. A good way to avoid falling into a deep hole is to find ways to minimize that debt. A smart game of finance involves avoiding debt or paying it off quickly.
Even if you don’t plan to file for bankruptcy, you could always do a consultation with a bankruptcy lawyer. After all, they can give you good advice to see if there are other options instead of bankruptcy. You may be able to do credit consolidation that combines all existing credit card debt. When it’s combined, you would then make one payment to the credit consolidation company. Depending on the company that you work with you may be able to have lower payments and pay off that debt faster. However, understand all these companies are not equal and may end up charging you additional interest. You may want to call your credit card company directly and make a deal to pay off your debt early and close the accounts. Even with student loans, you can have an early payoff amount that may be less than paying it over time. After all, when it comes to playing the game of finance, you should understand the art of negotiation.
Create a Budget
Remember bankruptcy can stay on your credit report for up to 7 years before it falls off. If you want to win the game of finance, start creating a budget now. After you have a baby, your money can easily seem like it’s flying out the window. Use something as simple as an Excel sheet to create an itemized list of things you need for the child and your household as a whole. Then you can focus on your necessities compared to your wants. Look around for sales that allow you to save on food and other expenses. Start clipping coupons in your daily mail flyers as well as online. You may enjoy home entertainment like many Americans. Instead of carrying on with several streaming services, you may want to cut most of them out and settle for one.
Start an Education Fund
As you look at your newborn child, you may be thinking about them taking their first steps towards kindergarten. While college may be a long way off, it’s not too early to start an education fund. With the ever-changing world, your child may not decide to go to a traditional four-year college. Luckily, there are many other professions available that may not require as many expenses of a traditional four-year college. For example, the trades will continue to grow over the years and provide a solid growing industry for many people to work in. Welding schools allow people to use their hands to work with metal to create ships, cars, and parts for buildings. People such as plumbers and electricians will always be needed and continue to make it growing income.
Because your child is a baby, you have plenty of time to save for their higher education needs. Of course, if you want your child to go to private school, you’ll be spending more money on education sooner than that. Either way, you have a few years to get started and a little bit now can go a long way.
Seek Out Child Tax Benefits
Having a child is very expensive upfront. Don’t forget your child is your dependent, so you will get tax benefits when it’s time to file again. If you haven’t done so before, work with a local tax accountant who can assure you get all of your child tax benefits available to you. They can help you understand what benefits you’ll get right now and what you’re likely to get when they’re older. Some of these tax benefits include your healthcare premiums and education expenses.
Write a Will
Unfortunately, many Americans believe only rich people need to plan their estate. You don’t have to be rich in order to meet with a local estate planning lawyer. After all, whether you have a modest house, or a small bank account one of two is still a part of your assets. Most people want their assets to go to their loved ones, such as their next of kin. Even if you’re young and healthy, unfortunately, there is no way to predict when your life will end. If you live a long time, things may happen where you may become incapacitated or have a reduced quality of life due to chronic illness. Make sure your little one and your partner are well cared for by planning your estate now.
The simplest way to do estate planning is by writing a will. A will is a simple document that names your beneficiaries and a couple of witnesses and specifies what you’ll be leaving behind. However, it must also go through probate for up to a year after your death. Probate is a time that the courts give creditors and anyone else to make a claim against the estate. If you want to ensure your loved ones get your assets faster and a more private matter, a trust is a better option.
Invest in Insurance
Start looking into affordable life insurance now. Don’t be fooled by being young and robust. As mentioned, you can die at any time and you want to ensure your family is taken care of. A valid life insurance policy means your family can give you a proper burial and have money left to live comfortably. The younger and healthier you are, the better terms you can get on a life insurance policy.
When it comes to the game of finance there are many ways that you can win and play. Look into life insurance, savings, education planning, and debt reduction. Having a child is a happy time in your life. If you play your cards right, you can enjoy your new baby and plan to have more. Take the advice from this article so you and your family can be comfortable for years to come.
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