6 Financial Planning Tips for Soon-to-Be Parents

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Having a child can be life-changing on multiple levels, including a financial one. If you're expanding your family, here are a few money-related moves to make before the baby arrives.

1. Figure out whether you can live on one salary

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It's often the case that when dual-income couples have a baby, one parent opts to stay home with the child for several years rather than deal with the hassle and expense that is childcare. And there's certainly nothing wrong with going that route. But before you do, examine your budget and make sure you have the wiggle room to live off one salary instead of two. Keep in mind that even if you're not paying for childcare, there's a host of expenses you'll likely incur once the baby arrives, from diapers to clothing to medical care, so crunch those numbers carefully before making that decision.

2. Boost your emergency savings

Bringing a child into the mix can open the door to more unplanned bills, whether health-related or otherwise. That's why it's smart to give your emergency fund a boost before the baby is born. At a minimum, you should have enough cash on hand to cover three months' worth of living expenses. Maybe you have that at present -- but do you really have enough to cover what three months of expenses will entail with a baby (or babies)? If not, it's time to pad that savings account before the new bills start coming in.

3. Read up on childcare costs

You probably won't be surprised to learn that childcare is expensive, but did you know that the average American family spends over $10,000 a year on full-time day care center care? And if you're hoping to hire a nanny so you can return to work, get ready for this one: The typical nanny commands $556 a week, which translates into nearly $29,000 a year. These numbers aren't meant to scare you but rather highlight the importance of knowing what sort of expenses you're getting into. This way, you can plan for them in advance, or perhaps adjust your career path for a more flexible schedule that lessens your need for full-time care.

4. Make sure your healthcare needs are covered

Even the healthiest newborn babies need lots of care early on. Furthermore, children in general have a tendency to pick up germs and get sick, which means you'll need a health plan that covers those inevitable doctor visits. If you're currently signed up for the cheapest insurance plan out there, you may want to rethink that before having a child. While it might come with higher premiums, a better plan could end up saving you money in terms of co-pays, deductibles, and other out-of-pocket costs.

5. Set up a college fund

It's no secret that college isn't cheap, and with prices continuing to climb, you may want to get a jump start on funding your child's education -- even if it means saving for college before the baby is born. Of course, if you're behind on emergency savings or don't have much wiggle room in your budget, then by all means, tackle those pressing items before worrying about a milestone that's a good 18 years in the making. But if you have the ability to set up a college fund, do so now and start contributing to ease the burden later on.

6. Get life insurance

You don't need to be rich to need life insurance; you just need to have someone who depends on you financially to warrant the cost of your premiums. And once you have a baby, life insurance becomes a no-brainer. The good news? If you're relatively young and your health is fantastic, you might snag a respectable amount of coverage at a reasonable premium. It's estimated that 75% of millennial parents are currently without life insurance, so don't be one of them. Review your coverage options, figure out what makes sense for you, and get that insurance lined up before diaper changes and feedings take over your life.

Getting your financial affairs in order is an important step to take before having a baby. Once that child is born, you can kiss your free time goodbye -- so focus on money matters now, while you're eagerly awaiting that awesome little addition.

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