How To Prepare Financially for Your First Child

I thought this post was fitting since a pretty close friend of mine just recently found that they are having their first child.

You can never prepare for being a first time parent.

Diapers, crib, strollers… it can be overwhelming.

Here’s another guest post from Joe Plemon of Plemon Financial Coaching, offering some basic tips on preparing financially for your first child.

How to prepare financially for your first child

Q: We are going to have our first baby in a few months.  What things should we be thinking about that will help us be wise with our finances?

A: The following ideas should help:

Have a budget

I realize that everyone needs a budget, but if you don’t have one in place, now is the time to get it working.  The good news is that babies don’t cost as much as society tells you.  The not so good news is that, as money grows tighter with a little one in the house, not having a written cash flow plan in place can get you in trouble.  Turn the TV off and plan an evening with your spouse to prepare a budget.  You will be glad that you controlled your life instead of letting it control you.  Here’s a good budget read at Free From Broke.

Have proper life and disability insurance in place.

Ask yourself this question:  “If something happens to my spouse or me,  how will the remaining spouse be able to care for our child and continue to pay the bills?”   You probably spend more eating out in a month than life insurance and disability insurance premiums would cost, so you absolutely can’t afford to not have them. Here’s some other personal finance essentials from Patrick @ Cash Money Life.

Make retirement investing a higher priority than college savings.

You may be tempted to start a college fund right away, but don’t sacrifice your retirement investments.  Junior has lots of options to cover college expenses, such as scholarships, work  and attending community college and state universities.  What alternatives to retirement do you have?  Think Your Way To Wealth has the basics on 529 Plans and ESA’s.

Make a will.

If both of you die without a will, the courts will decide who cares for your child.  Is this what you want?  Make a will so you can name  the guardian that you want.  Not having a will is just plain irresponsible.  Do it today.

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