Bringing home a new baby is a joyous and beautiful time in life, but it also signals the beginning of many new responsibilities. In addition to caring for and loving your new addition, there are practical and financial matters to attend to. Here are three important financial steps to take once you have a baby:
Get Life Insurance
Should a tragedy occur, you need to know that your family will be okay financially. If you don't already have life insurance, you should get a policy that will provide for your spouse and child if you pass away. Your spouse should have coverage as well, even if they don't work. This is because life insurance is not only intended to make up for lost income, but also to cover things like funeral expenses and childcare.
If you already have life insurance, you should speak to your insurance agent about adding your child as a beneficiary. You may also want to increase your coverage since your family is now larger and their expenses are therefore greater.
Create a Will
Much like life insurance, a will isn't something most of us want to think about, but the responsible thing to do is face this task head-on once you have a child. A will gets all of your wishes concerning what would happen to your family if you died in writing and makes them legally binding.
A will can include how your savings will be distributed, how your funeral will be paid for, and who will be the legal guardian of your child if you and your spouse die at the same time. By getting these preferences documented you will gain peace of mind, knowing that if something happens to you these important matters won't be left to chance.
Begin Saving for College
You may think that saving for college can wait, but the sooner you begin the easier it will be to save enough without creating financial hardship for your family. You can use an online college savings calculator to determine how much you should save per month.
Be sure to speak with a financial planner before you begin saving, since there are a variety of accounts to choose from, involving varying requirements and tax implications.
Taking these financial steps will give you and your partner a lot of peace of mind. By being proactive and making responsible financial and practical decisions, you will prevent future difficulties for your child.