first time parent finances

First Time Parent Finances : Your Must-Do List

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Preparing to start a family is one of the biggest milestones in life – and amid all the excitement of decorating a nursery, choosing names and attending scans, there are a few financial considerations that you’ll need to make, now that you have the ultimate responsibility for raising a new life. Here are the top considerations to help you shape your money decisions before baby arrives:

Get Your Health Insurance Sorted

Although you should already have health insurance cover in place, make sure you know what to expect in terms of the costs of having a baby and that you have the right cover. Create a forecast plan that covers your expected costs so that you know how to budget or save to cover them.

Plan For One Income

Maternity leave can be what you make it, but even if you minimise the time you have off, you’ll still be facing a period where the household only has one income, and it’s important to be realistic about this. Map out all your financial commitments and work out how you plan to meet them while income is reduced- you could even try a couple of months of preparation by living off one income only, and banking the savings to help cushion the blow later on.

Streamline Other Debts

If you do have debts you’re servicing, look into how you can reduce your payments while your baby is small and you have additional outgoings. Look to pay off or rearrange any credit card debt onto a 0% APR deal and visit sites such as RefinanceStudent.Loan to see if you can reduce repayments while you have a new baby.

Plan Your Post-Delivery Budget

Suddenly having a new member of the family means there are extra things to budget for when you do your shopping – formula, diapers and even purchasing equipment such as car seats and prams. These will need to be factored into your budget for a couple of years so they don’t catch you out.

Get Some Life Insurance

A must do for new parents is to get some life insurance cover in place. Strange as it may seem to consider the worst at such a joyful time, many childless couples don’t see the need for this expense – but once you have a family, it’s important to insure against any circumstances so that they are taken care of.

Start a Rainy Day Fund

Having no financial cushion is one thing when you don’t have dependents, but once you do, it’s more important to create some security so that should illness or job loss occur, you are able to pay for basics such as accommodation and food to keep the family together. Aim to build up at least three months salary in a savings account as a cushion against any bad times. Keep these savings separate from your child’s college fund and other pots of savings for specific purposes. If you do have high interest debts, focus on paying those off first, and then building some emergency money for your new family.

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