Having a baby has given you a new perspective on life — including your finances. Suddenly, you’re not just worried about making it until the next paycheck. Instead, you’re thinking about things like how you can set your child up for the brightest future possible and how to care for your family if something happens to you.

Revisiting your financial plan during major life changes is always a smart move, and there’s no doubt that starting a family is a big change. Instead of just worrying about your finances, take these actions to set your family’s future up for success.

 

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Enroll Your Baby in Health Insurance

Signing your child up for health insurance is one of the first financial matters to take care of after having a baby. Depending on your insurance provider, you’ll have 30 to 60 days to enroll your child in health coverage. You can enroll your child in an existing policy, change policies, or enroll in CHIP or Medicaid if you qualify.

 

Buy a Life Insurance Policy

Health insurance isn’t the only policy you need. Life insurance becomes important after you have kids because most couples couldn’t cover the costs of living including childcare on a single income. Life insurance keeps your family afloat if the worst happens, and buying it doesn’t have to be complicated. You can compare quotes online before talking with an agent, and if you want, you can even get a policy that skips the medical exam; neither simplified issue nor guaranteed issue life insurance policies require medical exams. However, if you’re in good health, you’ll probably save money with a medically underwritten policy.

 

Update Your Beneficiaries

As you get life insurance in order, think about the other accounts and policies you have. Have you updated beneficiaries since starting a family, or do you still have exes or your parents named on accounts? Update retirement accounts, insurance policies, and wills so they name your spouse or a trust as the beneficiary.

 

Upsize Your Emergency Fund

Insurance protects against big emergencies, but what about the little mishaps that throw a wrench in your finances? Whether it’s a broken-down car or a sick child keeping you out of work, it’s important to have a financial cushion for weathering all of life’s little emergencies. If you normally keep a three-month emergency fund, bump it up to six months now that you have a family. And if you don’t have an emergency fund at all, now is the time to start one!

 

Start an Educational Savings Account

It may feel strange thinking about college when your child is still a newborn, but it’s never too soon to start saving for your child’s future. Plus, education savings accounts aren’t only for college expenses. Depending on the type of account, you can use your savings for education expenses spanning from elementary school through college.

 

Make Sure Your Business Stays in Order

New parents who also run a business need to make sure they keep a close eye on operations, as time marches on regardless. For example, if you haven’t yet registered your business as an LLC, take some time to do so, as this will help protect your personal finances from your business’s finances in the event that something goes wrong. You can simplify the registration process by using a formation service like Zenbusiness.

It’s also very important to make those quarterly tax payments on time; this can help you avoid trouble come tax time, as the last thing you want is to stare down a larger-than-expected tax bill. Last but not least, devote some time every day to your business’s finances, which will help keep you abreast of what’s happening and what needs to be addressed.

 

Bonus: Plan for Charitable Giving

It’s not in the budget for every family, but if it is for yours, consider making charitable giving part of your family’s financial plan. Charitable giving is a wonderful way to help less privileged families and sets a great example for your children as well. Whether you give money or give time, your contributions make a big impact on the missions you serve.

It takes more than money to raise great kids, but that doesn’t mean finances aren’t important when starting a family. The steps you take today will impact your family’s financial well-being for years to come, so make sure you’re putting financial security at the top of your to-do list. When you make these financial moves a priority, you create a bright future for your growing family.

 

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The first year of marriage is a time of bonding, getting on the same page, and discovering one another. It’s also a great time to start making baby steps toward planning your future. There is no better time to address financial health and establish a plan than in that first year, as newlyweds. If you make plans and changes early in your marriage, you will be grateful down the road. Here are some questions for you and your spouse to consider as you grow together.

 

Have You Combined Your Insurance?

As newlyweds, there are a lot of little things that need to be done, like getting a marriage license, changing your last name, sharing budgets, combining finances and switching bills. To add to the list, it’s important to switch over insurance as well — Rhoads Insurance Agency can help you explore your options. When it comes to auto insurance, you may find that you will get better auto rates with a multiple driver/car policy. If you don’t have one, now is a good time to purchase an umbrella policy to ensure that you and your spouse have adequate coverage.

Early in your newlyweds stage, you jointly should also make a decision on whether you want to go on the same health insurance policy or stay on different plans. If your employers offer you health benefits, it might be wise to take advantage of their investment in your plan. If you have a goal of starting a family down the road, then it’s a good time to look into short-term disability insurance, which can help offset time off for any unpaid maternity leave.

 

Is Home Buying in the Future?

Whether you want to buy a home immediately or down the road, there’s no time like the present to begin preparing. Setting the mutual goal early on in your marriage will give you both something to work towards and create a unified front in making it a reality. As soon as you get back from your honeymoon, it’s time to begin saving with the goal in mind of no longer paying rent, but rather having that rent payment go toward a mortgage and ownership in a home.

To get an idea of what home buying would look like and make the appropriate preparations, start researching mortgages as soon as possible. This research will show you various loan types, what your credit will need to look like, what your down payment should be, and potential interest rates you will be working with. You’ll discover things like how conventional mortgages will give you better interest rates — check PennyMac current rates to help you decide if a conventional loan is the best option for you. If you don’t have great credit or you don’t have a substantial down payment, then perhaps an FHA loan would work better.

 

Do You have a Plan for the Worst-Case Scenario?

The basic estate plan consists of four basic documents:

  1. Last Will and Testament
  2. Durable Power of Attorney
  3. Medical Power of Attorney
  4. Advanced Directives for a Natural Death

If you had these four documents created before you got married, it’s time to update them to factor in your spouse. If neither of you has these documents, then you should invest in professional attorney fees to have them drawn up.

This basic estate plan will do the following:

  • Ensure your assets go where you want at your death (each state has different laws if you die without a will, so don’t bank on the fact it will all go to your spouse).
  • Enable your spouse to make all the financial decisions in your stead in the event that you are unable to do so.
  • Assign an agent to make medical decisions if you are prevented from doing so.
  • Direct your medical team on your end-of-life choices (i.e., Do you want life support?)

Making financial decisions and plans early on as newlyweds will help establish a strong foundation in your marriage. Take the time to do the tedious housekeeping stuff now so that you don’t have to worry later on down the road. Make it a priority to work as a team in all aspects of your life; you will be grateful later that you put in the work.

 

Contact Rhoads Insurance Agency (484-509-1784) to go over your insurance options and get assistance with retirement planning and college funding.

Financial planning for parents is essential at every level. If you want to ensure that you have things under control, Rhoads Insurance Agency advises that you take a look at your current situation and see what needs to be changed. This way, you’ll develop the financial security for which your future self will be thankful.

 

Make Sure Your Budget is Accurate

If you’re like some people, you may have a general monthly budget that you keep in your head or scribbled in a book somewhere. That’s a good start, but that’s not enough to maintain good financial footing.

According to Payoff, a successful budget starts with knowing your expenses down to the last cent. This should include not only recurring monthly payments but also sporadic ones, like car insurance payments and registration fees. Make sure you account for your savings and debt payoffs as well. It can be difficult to get everything to come together on paper if you have a lot of information to juggle. In that case, consider using top-notch budgeting software that will bring everything together for you. Some programs even offer tracking features so you can see how much you’re saving or how much of your debt you’ve repaid.

 

Plan for Emergencies

When you’re dealing with financial planning, you can’t neglect your emergency fund. Traditionally, it’s advised that you have between three and six times your monthly income set aside for emergencies. Since that may seem overwhelming at first, Better Money Habits suggests tackling manageable saving tasks instead of focusing on the grand total. Even if it’s a small amount, it’s important to start saving and it’s recommended that you use automatic transfers so you have no excuses.

If you’re looking for ways to save so you can build your cushion faster, consider using discounts when you’re shopping. It can also be helpful to buy things second-hand as long as it’s safe to do that, and focus on reusing items whenever you can. You can also look into getting a life insurance plan that has cash value accumulation, which can be used in emergencies and to help pay for your child’s college education.

 

Plan for the Future

As you’re putting your financial plan into action, make sure you’re thinking about your future as well. This is where estate planning comes into play. When you have a plan in place, it will ensure that your assets are handled as you wish and any children under 18 have an appointed guardian.

Another must-have is life insurance, as the funds from the policy will cover expenses generated by your passing or if you’re incapacitated. Term life insurance, in particular, can be very helpful as it guarantees a set death benefit after a certain amount of time. The good thing about these policies is that they tend to be fairly inexpensive, especially for those in good health. The funds from a term life policy can be used to cover things like unpaid bills, lost income, and funeral expenses. You may also consider looking into life insurance with living benefits, which means that you would receive the death benefit before your passing if you become chronically or critically ill.

 

Re-Invest In Your Future by Heading Back to School

Although the idea of going back to school might be scary, there are numerous benefits to seeking out higher education to establish a better future for your family. For example, an MBA can be an extremely useful tool to help you achieve that sort of stability that we all crave. Not only can you increase your earning potential with an MBA but you can also gain invaluable experience that will serve you throughout your life. This expanded skill set will have a direct impact on leadership ability and business knowledge that can lead to an increase in overall career prospects. Regardless of what degree you choose, know that there are numerous ways to advance your career through online programs that cater to working professionals.

 

Balance College and Retirement Savings

Everyone wonders if they have enough money saved for retirement, and as a parent, you also have to think about the cost of a college education. Based on recent estimates, a public college education can cost as much as $230,176 in 2035. It’s tough to definitively say what your retirement needs will be when you get to that age, but a cost of living calculator can give you an idea.

This means you need to find a way to balance saving for your kid’s college at the same time as your retirement. Depending on your personal circumstances, you can choose to stagger your savings or save for each at the same time. Whichever route you choose, make sure you do your research so you’ll end up with a strategy that works for you.

Financial planning for parents can be equally important and challenging. That doesn’t mean it’s impossible though. If you have an accurate budget and a detailed plan for the future, your ideal financial future will be within your grasp.

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When it comes to exploring your insurance and college funding options, turn to expert Dan Rhoads at Rhoads Insurance Agency. Reach out today for assistance.