Brought to you by: OneAscent Wealth, www.oneascentwealth.com
According to the latest data from the USDA, parents can expect to spend between $200,000 – $300,000 raising a child from birth to age 17. And that’s just spending on necessities like food, clothing, transportation, and medical care! Once you add any extra-curricular, educational, or entertainment expenses of having a family, that number will surely go up. You and your partner probably have an extensive to-do list lined up for the next nine months. Try to tackle the following financial prep items a little at a time as you move closer to the big day.
First Trimester: Review Your Household Budget. The average cost for labor and delivery in the U.S. is almost $7,000. You could easily spend another $1,000 on newborn clothes, toys, a crib, car seats, strollers, and other essentials. Add in new monthly expenses like diapers, baby food, and daycare, plus any changes to your or your spouse’s employment status, and it’s safe to say that your new family probably needs a new budget. Review your last few months of credit card and bank statements. Determine how much money is left over at the end of the month and see if that amount can cover the upcoming baby expenses. If not, try implementing small changes that can free up much needed cash flow for when the baby arrives. Emphasize weekly meal planning to reduce fast food runs. Cancel subscriptions you don’t really use. Pay down any credit card debt you’ve been hanging on to.
Second Trimester: Update Your Estate Plan. No one likes to think about worst-case scenarios, but you really won’t be in the mood to write or update your will and health care directive when you’re caring for a newborn. Have these conversations with your partner and prepare those documents ahead of time. Also, if you and your partner don’t have life insurance, it’s probably time to purchase some. The younger and healthier you are, the lower your rates will be and the more coverage you’ll be able to afford.
Third Trimester: Plan for the Future. Babies bring many changes, and your future will now be markedly different. Start to consider what you want your family’s finances to look like: Do both spouses want to continue working? Will we need to move into a bigger space? Do we want our kids to go to college?
The only thing we love almost as much as new babies is helping new parents give those babies a head start. If your family is growing, we at OneAscent would be honored to serve you by helping you prepare for the many wonderful changes that are soon to come!
Advisor at OneAscent Wealth
Investment advice offered through OneAscent Wealth Management, LLC, a registered investment adviser with the United States Securities and Exchange Commission.