Starting a family of your own is one of the most exciting and terrifying things you will ever do as a couple.
You’ve been living the good life as a couple. Your time was your time. Other than some student loan debt hanging over your head, your money was your money.
That’s all about to change. Not only will your time be stretched to the max (and then some), but you are inviting an entirely new set of financial problems, acronyms, and confusion into your life.
Don’t let your fears and uncertainty about how to move forward keep you from taking action. There are critical tasks to handle in this stage of life, so let’s get going.
Work Your Finances as a Team
If you are thinking of starting a family I’m going to hope you are happily married and already working as a team. But if you aren’t on the same page financially, stop. You’ve got to fix that first. Adding in a hungry, crying baby into the mix won’t make your money decisions any easier.
Here are two keys to managing your finances together as a couple:
- Couples & Money – Building a Solid Relationship with Money and Each Other
- The 11 Best Personal Finance Software to Get Your Money Swag On
Protect Each Other with Life Insurance
Listen, talking about death isn’t exactly fun especially when you’re considering starting a family. Yet having this discussion could ultimately be the best thing you ever do to provide for them.
You want to have adequate life insurance, especially with a family, to protect against the loss of income from losing a spouse. Term life insurance is incredibly cheap, especially at a young age. We understand that purchasing any form of insurance, from finding the best auto insurance companies to finding the best health insurance for your needs can be overwhelming, we are here to help you!
Here’s how you determine how much term life insurance you need to purchase to protect your family:
Diapers Ain’t Free: How to Boost Your Cash Savings
Imagine bringing a child into your family while living paycheck to paycheck and zero savings in the bank.
Yikes. Not exactly what I would call a “relaxed family environment”… not by a mile.
You need cash on hand for many types of purposes when starting a family: an emergency fund (that you need regardless of starting a family or not), covering nursery “set up” items like major furniture, paying for prenatal doctor visits and labor and delivery charges, and of course the day-to-day expenses of diapers, diapers, and more diapers.
Save more money and boost your savings with these tips:
- 70 Super Easy and Practical Ways to Save Money
- The 11 Best Short Term Investments For Your Money Right Now
- Emergency Fund to the Rescue
- Top 10 Best (and Free) Online Budgeting Tools
Drop the Debt
Debt while starting a family is like letting someone strap a 60 pound rucksack to your back and telling you to go run 5 miles in the rain.
It’s miserable. (Trust me.)
Before you add additional mouths to feed under your roof you want to drop your debt as low as possible if not completely.
Destroy your debt with these tools:
Upgrade to a Larger, Safer Vehicle
You can’t comfortably carry a baby around in a compact car. Getting into a larger, safer vehicle is typically a smart move — unless you lease the car or focus on the monthly payment rather than the overall cost.
Here are three tips on saving money with it comes to your wheels:
- How Much Car Can I Afford?
- Is It Better to Lease or Buy a Car?
- How My Grandmother’s 1998 Chevy Lumina Made Me Over $2 Million
Save for Retirement So You Don’t Have to Move In With Your Kids in Your Golden Years
It’s normal to want to provide the best life for your kids. For many that means focusing on college savings soon after a child comes on the scene.
There’s one giant problem with this mindset: there are no loans or scholarships for retirement.
Your retirement must always come before setting aside dollars for college. If you can do both, great! But retirement comes first.
The longer your money is invested, the more likely your nest egg is substantial in retirement. Start now:
- Best Places to Open a Roth IRA
- Ready to Start Investing? Here’s the Best Online Brokers for Beginners
- Video Review and Walkthrough of Personal Capital
- Personal Capital Review
Cover College Costs By Saving Early and Often
In the blink of an eye your newborn will go from poopy diapers to packing up their bags. It happens that fast!
If you have any desire to help them pay for college, then you need to start a college savings plan immediately. You can do a traditional savings account at your local bank or setup the most popular option the 529 College Savings Plan.
- Common Questions on 529 College Savings Plans
- Don’t Make This Mistake When Saving For Your Kids College
- Difference Between ESA and 529 College Savings Plans
Maintain Great Credit to Save Thousands
Your credit is your lifeline to loans for big purchases like homes and cars. It also influences your insurance rates.
A bad credit score will result in higher interest rates when you go to buy a home. The difference in a $160,000 mortgage over 30 years at 4.25% and 5.25% is $34,712. Your monthly payment will also be larger by $96.43.
Take of your credit and it will take care of you. If you don’t know your credit score, here’s how to get it:
Settle Down and Buy a Home
Want to upgrade your digs? Maybe get an extra bedroom or two so your kiddo won’t sleep in your room throughout childhood?
You’re going to need a healthy down payment to start. Grab an online savings account, and set up automatic contributions into that account to build up a separate fund specifically to buy a home with.
Then make absolutely certain you are going to stay in an area for at least 5 years before buying a home. Ideally you will live in that home for at least ten years; any less and you are looking at a significant financial hit when you pay realtors fees to sell in the future.