While many people look inwardly at the start of each year and adopt a "new year, new me" mantra, there are others who get a bit more ambitious with their resolutions, pledging "new year, new addition to the family."
In fact, given that September is the most common month for births and the average pregnancy lasts 38 weeks, it stands to reason that quite a few folks are making these decisions around the holidays.
Whether you're already expecting or still trying, there are a few essential financial steps that all future parents should take both before and after the delivery. Having a child is inherently stressful, and making important decisions about money is no one's idea of a good way to reduce anxiety, but it's also the only way to avoid even bigger headaches down the road.
Build a baby budget
There are a lot of one-time and recurring expenses associated with a new child, and depending on your present financial situation, figuring out how to cover them could require a significant amount of planning on your part.
If you already have a budget, adjusting it to accommodate a child should be easier than starting from scratch. If you've never budgeted before, now's the time to start by taking a look at a few months of credit card statements, receipts and regular monthly expenses like rent and utilities to determine how much you're spending in each area of your life, and where you can afford to start cutting back.
Next, add up any and all recurring costs a newborn will necessitate, such as food, diapers and child care, and attempt to balance your post-baby budget. In the months leading up to delivery, it's also helpful to develop a pre-baby budget, in which you save as much as you can in advance of that new mouth you'll have to feed.
Also take into account your income, especially if you or, if applicable, your partner will be forced to take unpaid maternity or paternity leave to care for your new bundle of joy.
Even if you determine that you have enough income or savings that you won't need to adopt any severe austerity measures, it's never a bad idea to create or add to an emergency fund, particularly since a child comes with a whole host of potential emergencies.
Anticipate coverage and costs
While United States citizenship certainly has its benefits, it doesn't come cheap. In fact, the U.S. is the most expensive country in the world in which to give birth, with the average cost of having a baby currently at $10,808, according to Business Insider. That number can swell as high as $30,000 depending on other, often uncontrollable factors, including what state you give birth in, whether or not you have a Cesarean delivery and what type of health insurance you have.
That last variable may be a bit easier to determine than whether or not you'll require a C-section. Early on in your pregnancy, speak with your health care provider to get an idea of what sort of medical bills you will likely be on the hook for during prenatal care, labor and delivery.
Since infants receive their first doctor visits within the first week of life, now is also a good time to choose a pediatrician. Ask around for recommendations, find a well-respected physician and then confirm that he or she is in your insurance network.
Prepare for beyond the birth
After you get through those nine months of pregnancy, you've still got another 216 months of raising your child from infancy to adulthood. And if you haven't planned financially for that part of the journey, it may prove to be a challenging 18 years.
Though no one wants to dwell on the possibility of death during a celebration of life, it's important to ensure that your child will be protected in the wake of a tragic event. To that end, you and your partner should adjust your beneficiaries so that your child will stand to inherit any money you could pass on. If you don't already have a life insurance policy, having a child is a good reason to take one out. And while you may not have thought of disability insurance, it's more likely than life insurance to prove necessary, according to Nerd Wallet.
Other somber yet important estate planning actions to take include naming your child as a beneficiary for any 401(k) or IRAs you have, designating a guardian in the event of your untimely demise and using a will or trust to specify how and when your child can access any and all funds you leave behind.
Of course, it's not just the worst-case scenarios that require planning. If you dream of your son or daughter one day going to college, you'll need to start saving up for that dream early and often.
Opening a tax-advantaged, state-sponsored 529 plan is a good way to start saving for your child's education. It's also challenging yet wise to stick to the "2k rule," which dictates that you multiply your growing boy or girl's age by $2,000 to figure out how much you should already have saved up for their education, according to CNBC. That means when his or her first birthday rolls around you should have $2,000 saved for college, $10,000 in funds by the fifth birthday and $34,000 by the time of their seventeenth.
Between the world-record-setting cost of giving birth, the ever-increasing price of tuition and the many years in between spent providing regular meals and a roof over their head, it's safe to say that having a child isn't the most profitable investment one can make. But with the right amount of planning, it needn't be a catastrophic one, either.
And if you need help hitting your savings goals, for a new child or any other major life decision, reach out to a Landmark Bank representative to discuss your options.
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