Critical Financial Tips for New Parents
Whether you’re parents-to-be or are already cuddling your newborn, you’re probably well-acquainted with the stress and uncertainties of parenthood. After all, the responsibility of providing for and protecting an innocent, fully dependent human life will make even the most confident among us second-guess our competence!
The moral of the story? No one is ever completely prepared for parenthood. But that doesn’t mean there aren’t things you can control. By making smart financial decisions, you can ease the shock of the changes to your cost of living and create more financial stability for your family. To help you get started, here are a few practical ways you can do just that:
Sometimes, a growing family calls for a bigger home. If you will be needing to move homes, you’ll need to decide whether to rent or buy. The option that is right for your family depends on several factors. If you think you may move again within the next couple of years, or if there are not many available homes in your area, you might want to consider renting. Also, if you are in the process of rebuilding your credit, renting a home may be the best way forward until your credit is good enough to land a favorable mortgage. Fortunately, there are many apartment rental listings available online. Some of these offer 3D views and tours so you’ll be able to easily vet potential units without having to visit in person.
If you’re determined to lay down your roots and move into a home for the long-term, buying could be your best option. Buying a home is a big step for any family, and it requires you to complete some essential steps so that you can avoid as many challenges as possible on your journey.
For example, you’ll need to hire a great real estate agent who has experience in your area. You’ll also need to estimate what type of home you can afford, get pre-approved for a mortgage, and take time to research available homes that would accommodate your needs.
Save for emergencies.
Most Americans don’t have enough money in their savings to pay for unexpected expenses. The problem is, virtually every American is hit with unexpected bills for emergency repairs, medical incidents or diagnoses, or any number of other unexpected events.
Revisit your budget, and dedicate part of your income to a savings fund. Start by trying to save $1,000, and work your way up until you have enough to cover at least three months of expenses.
Tackle your debt.
Building a family is much more difficult when you are saddled with substantial debt. If you have a high debt-to-income ratio and are maxing out your credit utilization, it can significantly impact your chances of getting a mortgage with reasonable terms.
As you’re reworking your budget, come up with a plan to eliminate all of your high-interest debts within an established timeline, and keep yourselves accountable by checking your progress each week. Once you begin paying off debts and continue to make consistent payments, motivation to attack your debt more aggressively may ensue!
Plan for retirement.
A lot of families prioritize their children’s educational future over retirement. But that can be a big financial mistake because having a solid retirement plan in place can benefit you and your children.
Not planning for your retirement can make it difficult to obtain financial stability when you are older, and that can be a stressful situation for you and your entire family. Make sure you have your retirement figured out and then start allocating funds to your children’s education.
Consider life insurance.
Term life insurance policies are often enough to protect your significant other if something happens to you. But when you begin to expand your family, you may want to change over to a whole life policy.
Most insurance companies require a blood test and full physical that will assess your overall health, and the results of those tests will play a role in your premiums. For instance, you can be considered to be at high risk if your blood pressure, cholesterol, or glucose levels are skyrocketing.
Maintaining a consistent fitness routine and eating a healthy, balanced diet can help you to improve your overall health and get better test results. Moreover, implementing healthy habits like these can also help reduce the stress and anxiety that come with being a first-time parent.
Be sure to take care of your all-around health and wellbeing during this time in your lives so that you can be the best versions of yourselves for your little bundle of joy, while also reducing your risks of encountering overwhelming medical bills!
No parents can be fully prepared for the arrival of a baby. But there are things that you can control, such as taking steps to improve your financial position. There will be drastic changes to your costs of living, and implementing the tips above can go a long way in boosting your family’s financial health for years to come.