Having a Baby? Three Financial Moves to Prepare Yourself

There are few things that can bring as much joy to a young family than a new family member. Raising a child can bring people together and expand your capacity for love and understanding in the world. But babies are also expensive, and if you are unprepared, the costs can be debilitating. Here are three financial moves you should make to prepare yourself for having a baby.

Start College Savings

College is expensive. It has never been cheap, but rising prices have led college to be a massive expense, and many students spend years or decades paying off their student loans. Give your baby a head start and start a college savings account as soon as you decide to start trying for a baby. This gives the money you put away the longest time to grow into a substantial amount that can pay for or help significantly with the costs of college. Starting the savings with a larger initial investment (a few thousand dollars or more) and then putting away another couple thousand every year after that will allow your investment to grow well by the time college rolls around.

Update Your Insurance

If you are starting a family, then you are going to need to update your insurance policies to make sure that your whole family is covered. This is true even for insurance policies that are not for your entire family. For instance, you may want to update your life insurance policy when you make the decision to have children. Term life covers you only for a set amount of time. When you have children, you may want to extend to a longer-term plan that will cover you for their young lives to make sure they are taken care of in the event of an accident.

Make a Parental Leave Plan

The reality is that in the United States, many employers don’t offer much if any parental leave, especially if you are a father rather than a mother. So, if you want to take a longer leave to be with your children when they are first born, you need to plan. Save up your vacation days and save up your money as well. Talk to your employer beforehand about accommodations and options. The last thing you want is to be stressed about money when you should be celebrating the birth of your child.

When you have a baby, your whole world changes. That includes your financial decisions, as well. Make sure to make these three financial moves before having a baby so that you are financially prepared for the future.

Read this next: How to Set Yourself Up for Financial Success in Your 20s

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