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As you open a new chapter in your life, you need to make some crucial decisions. Both before your baby’s arrival and in the coming months and years. This will be helpful to plan for the financial challenges that you will face.
Although childhood expenses aren’t predictable, bringing up children is expensive. Therefore, before you bring home your bundle of joy, ensure you make the following financial considerations.
Plan for Cash Flow
You should plan several months in advance for the increased expenses of bringing up a child. This way, you will adjust your lifestyle and cash flow before your child is born. The highest cost you will incur is childcare. Therefore, whether you plan to use a nanny or a daycare facility, you should gather cost estimates to help you plan.
Another necessary cost that you should consider in your cashflow is healthcare. If you and your partner are both employed, you should review the benefits offered by each employer, including healthcare plans, and choose the most suitable one for the delivery and care of your child.
Decide Whether to Move or Extend your Home
Whether you’re planning for your first or fifth child, your home needs will change. A two-bedroom condo is a perfect place to start a family, but as the family grows, it won’t be enough to handle all your family’s demands. If your children fill the house with their toys and noise, your home may look smaller. Therefore, you may need to invest in a bigger house. However, the cost of purchasing a home is very high, and it may make more financial sense to extend your home. Consult a Scenario Architecture professional to determine whether this is the best option.
Start Saving for Your Child’s Education
Education is expensive, and the cost will most likely increase. Therefore, prepare for your child’s future to ensure that you have the funds for books, tuition, and other school-related expenses. There are several ways to save for your child’s education, like locking your money to be used only for educational purposes. You can also consider index funds and normal savings accounts.
Review Your Insurance
Your little ones will be completely dependent on you to provide for them. Therefore, you need to review your insurance policy to determine if it is sufficient for your growing family. You will most likely have to adjust your cover and include your little one in your health insurance. Additionally, consider purchasing a life insurance policy for you and other members of the family. Having an insurance policy is the only way to prepare in case the unimaginable happens, and it will help you financially during challenging times.
You need to make some important financial decisions before your little one arrives – like planning your cash flow, deciding whether to move into a new home or extend, start saving for your child’s education, and review your insurance cover. However, there are several other financial considerations you will have to make, including getting the right cover, planning for prenatal leave, and setting up an emergency savings account.