According to the U.S Department of Agriculture, the cost of raising a child from birth to 18 was a whopping $233,610! A beautiful breakdown of how the money is spent is pictured below.
The cost of raising children, like everything else is rising and your financial security can be put on the back burner if you are not intentional about planning for these beautiful additions to your family. Here are 4 ways to prepare your family for a new member!
- Have an established nest egg that covers 3 months of expenses. Outside of taking physical recovery time from work, there are also doctors’ appointments that you will have to miss work for, children get sick, you may want to take mental health days to cope with the transition. Having a nest egg allows you to be able to take care of you, your family and protect your financial security. Additionally, should any complications arise, you are in the position to extend your leave if need be.
- Check your benefits at work. If you are planning to have a baby but are not pregnant, add on those supplemental insurances such a Disability and insurances that provide income for when you give birth. If you have these in place, WONDERFUL! Make sure you print a copy of the benefits and put them in a folder so when you go on maternity leave, they are accessible. Also, make sure you have a good contact established in the Human Resources Department so you can get your paperwork processed in a timely manner.
- Go ahead and increase your insurance. Now that you are expanding your family, you will want to make sure you are mitigating the risk of your absence. No one likes to think about death however, it is better to be prepared with enough life insurance than to leave your loved ones facing financial insecurity because of your absence.
- Once you give birth, update your estate plan to include the names of your child(ren) and make sure if you plan to leave anything to the child, you have it in a trust under will. Your attorney will be able to explain more. However, do not risk their financial security by potentially leaving them with funds they are not ready to manage appropriately.
Planning for a new baby is quite exciting and many do not think about the financial parts until they run into a situation after having a baby. You can control this part. The late nights, lack of sleep and frequent feedings, are all a part of the process! Know this, if you are willing to start early, adding on the additional layers will not seem as intimidating.
If you are ready to get a plan in place to establish financial security, book a discovery call with me so you can move you forward to your freedom!