Your Essential Financial Checklist for Starting a Family

The decision to go forward with your plans to start planning is a joyous one, but it can also lead to increased stress especially if your financial house has not been child-proofed.  There’s no reason why you need should get caught off guard or short of cash if you’ve taken you and your spouse through the essential financial checklist for new families:

• What is the cost for baby-proofing everything? You need to take a complete inventory of the requirements needed for you house, your yard, your card to bring them up to baby standards.

• What is the incremental increase in your budget? In addition to another mouth to feed your newborn will require a constant stream of supplies.  Expect an increase in your electric and water bill (you’ll be doing several extra loads of laundry a week). Can you afford a warehouse club membership?

• Is your health coverage up to snuff? Obviously you will need to add your child to your policy, but have you reviewed it recently to determine if it has the right coverage?

• What are your child care needs? If you’re both going to be working, the average child care costs can run as high as $800 a month, almost the size of a small mortgage.  Have you looked into alternatives such as employer daycare, nanny-sharing, reducing work hours?

• Will you require parental leave from work? What does your employer provide in terms of time and paid leave?  Beyond that, what can you afford in time off?  Do you have a savings account to offset income loss?

• Can Uncle Sam help? Have you looked into government assistance programs for new families?  What types of tax relief will you be eligible for (i.e. Dependent Care Tax Credit)?

• Are your papers in order? You need a will that includes guardianship arrangements.  You need a life insurance plan that will fully cover your family’s needs.

• Have you paid down your debt? It’s tough to cover the additional expenses of a new family while still paying costly interest charges.  Debt elimination should be a priority.

• Do you have an emergency fund? Unless you have at least six months of living expenses saved in a liquid account you are inviting financial disaster.

Of course, there are many other considerations, but until you have address these critical issues, the others should be a priority. Article by: Approvals.com