Getting A Handle on Planning After the Birth of a New Baby

Congratulations on your newest addition. There are many different things to think about in the wake of becoming a new parent but one of the most important is putting an emergency fund. The U.S. Department of Agriculture shares that the cost of raising a child up to age 18 is more than $230,000 for a married couple of little income with two children. Your own financial house needs to be in order before you can provide for your children. A starter emergency fund of $500 or so can help you in the event that a sudden and small expense crops up.

You’ll eventually want a bigger fund but it could take several years to get there. You will also likely need life insurance as well. Young parents will typically need up to 10 times their income in terms of coverage. You can boost your emergency and retirement savings until those accounts are on track. If you still have money left over after that, consider contributing to a 529 college savings account.

Furthermore, you will want to update all of your estate planning documents after welcoming a new loved one into your family. You’ll need to ensure that your will includes stipulations about who should step in in the event that you pass away to care for your minor child. A will is the only way to name such a person and it needs to be formally documented in case something ever happens to you and/or your spouse. Consulting with an experienced estate planning attorney is recommended.