While the arrival of a baby is an exciting event, it also brings additional financial challenges and decisions for the whole family. Outlined below are a few key financial considerations to help new parents prepare for many of life’s unknowns.
Additional term life insurance is an important aspect of your financial plan and something that you may now want to consider. You may also want to consider purchasing umbrella liability insurance (particularly if hiring an in-home caretaker for the baby), to provide additional protection in case an accident occurs on your property or if you are sued. On the other hand, skip insurance that you don’t need: Unless you depend on your children for financial help, insuring young children is usually unnecessary.
Unfortunately, you can’t double up on the FSA and the tax credit. From day care to the monthly grocery bill, the cost of raising a child is climbing at a steep rate. It will cost an estimated $241,080 for a middle-income couple to raise a child born last year for 18 years, according to the U.S. Department of Agriculture. While the steps above can never offset this cost, there are many things, financially and non-financially, that should be addressed with the new addition.
Life is a journey; plan for it.