It’s no news that babies cost money. You’ve already figured that out when you set up your nursery and put together a registry for your baby shower. You know that you’ll have to adjust your budget for all sorts of baby-related expenses, from diapers to daycare.
Budgeting is not the only financial change that you should make as a new parent. Look at these other financial tips you should follow before your bundle of joy is born.
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Make an Emergency Fund
Before your baby is born, you should start putting together an emergency fund. You’ll want to have a stash of savings you can rely on when an urgent expense crops up. Think of an expense like a sudden prescription you’ll have to pay for if your baby gets an ear infection. You can withdraw the necessary savings from your emergency fund and pay for this right away.
An emergency fund will offer more financial protection as your baby grows up. When they’re a toddler, you might find that they cause some damage to your home and belongings. They might flush toys down the toilet, toss your phone down the stairs or pour orange juice all over your computer keyboard. You’ll appreciate having an emergency fund to cover these repairs quickly.
Without an emergency fund, you’ll need to find an alternative way to pay for these urgent expenses. A personal short term loan online could be a potential alternative for you. As long as you are eligible for a personal short-term loan, you can send in your online application and wait to hear about your approval status. With an approved short-term loan, you can manage the expense quickly and follow a repayment plan afterward.
You should only turn to online loans for emergencies. They’re not meant for everyday expenses.
Prepare for Tax Season
Filing your taxes as a parent will be different than filing as a child-free couple. You will need to include your baby on your return. This will require a Social Security number. If your baby doesn’t have a Social Security number, you will need to go to a Social Security Administration and apply for one before you file.
Parents also qualify for certain tax credits and deductions. Don’t miss out on these incentives.
Start a College Savings Plan
If you have enough room in your budget, you should consider starting a college savings plan as soon as possible. The more time that you give yourself to save, the more you’ll collect by the time your kid graduate’s high school.
You can put the college savings in a standard savings account. Better yet, try a 529 plan — this is specifically designed for education savings.
Get Life Insurance
You should consider filing a life insurance policy. A life insurance policy can provide coverage in case you pass away unexpectedly. Your loved ones, including your child, will have financial support in this difficult time. It’s not pleasant to think about this worst-case scenario, but you should do everything you can to guarantee your child’s care.
Update Your Will
If you have a will, update it to include protections for your child and list preferred guardians to care for them while your child is still a minor. If you don’t have a will, this is the time to make one. Your partner should do the same.
Your baby will arrive in no time. So, follow these tips and prepare your finances for parenthood.