Financial Tips For New and Expecting Parents

1. Do The Math!
The government calculates it will cost a middle-class family more than a quarter of a million dollars to raise a child born in 2012. The cost of raising a child though depends on parents’ goals and expectations for the child as well their level of income. Google search for Baby Calculators and you can find a lot of great resources to find out the expenses you might spend for your baby.

2. Have a Rainy Day Fund
It’s important to have six months to a year of savings in the bank to account for if one of the household’s income earners loses his or her job. Start saving as early as you can, preferably before your child is born. It’s never too late though!

3. Follow a Budget

There are lots of hidden costs to raising a child, such as increased health insurance costs as well as extra visits to the doctor. Generally, food, clothes, and diapers are expenses that can add up but they are all generally expected. The hidden costs can creep up so make sure to account for everything!

4. Obtain Life Insurance and Write Your Will
You should start thinking about life insurance right away if you are an expecting or new parent. Calculate future college costs, remaining mortgage payments, and child-rearing expenses when considering the right policy. Also, consult with a lawyer and write a your will. In addition to this, when planning for how your estate will be entrusted, remember these things: name a person to be the guardian of your children should anything happen to you, store a ledger book of your assets and debts for said guardians and your kin, and make sure to keep up-to-date information on insurance beneficiaries.

5. Start a college savings fund

A public four-year college is expected to cost about $250,000 by the year 2030. Save early, and consider saving plan options such as the 529 College Savings Plan or a Coverdell Account. There are other plans too, but the ones mentioned don’t have a demonstrably negative impact on financial aid eligibility for your child.

Mikella CPA
Phone: (512) 779-7747
Fax: (512) 276-6610
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