Expectant Parents: How to Create an Effective Financial Plan

Foreword

The following article was submitted to me by Sara Bailey and I believe it's priceless. Sara shares her experience after losing the love of her life and the father of their two children, Greg.

I hope Sara's story helps you take a step back, pause for a moment, and be grateful for and cherish every minute of every day with those you love.

Also, I truly hope that the article will urge you to take action and protect yourself and your loved ones from preventable financial hardship in case of an unexpected life change. 

Thanks to this article, my husband and I saw our Insurance Advisor a few times over the past couple of weeks. We learned a lot about the benefits of various types of insurance coverage and were able to set up a plan that will help our loved ones to keep going, should we die or get sick "yesterday". 

When your family member is sick, you should be able to take as much time off as needed, to help them get better! You should have a plan to help you keep your business or your career safe, until you are ready to get back to them. It's not a secret, that we all have an expiry date and get sick every once in a while. Why not plan for it? 

Lastly, I insist that you TAKE CONTROL AND ACTION towards building your own successful future - whatever your definition is - and live your life fully, for many-many years to come! There is no excuse not to plan and execute your personal success strategy. 

Cheers to planning, executing and being prepared!

"Like many people who have lost the love of their life, I never in a million years thought I’d be here. On my 40th birthday — which I spent with my husband and our two kids bowling, devouring cupcakes, and laughing more than I ever thought was possible — I never dreamed that by my 41st, I’d be a grieving single mom raising a son and daughter on her own. But here I am, and with each passing day, I get a little stronger, and life gets a little easier.", 

Sara Bailey, The Widow, thewidow.net

Expectant Parents: How to Create an Effective Financial Plan

A baby changes everything. The minute you learn you are expecting comes with a whirlwind of excitement and new worries. Suddenly, you are faced with a massive to-do list in order to prepare for their arrival. Between prepping the nursery and buying baby gear, there are the less fun tasks that need to be addressed, too. Creating a financial plan during your pregnant months is a vital step in preparing for your new child.

Start Saving Now

It is always wise to have an emergency fund. Life can be unpredictable: You or your partner could lose your job; one of you could get injured or sick, or the car may need to be replaced. When you have a child, these costly unexpected situations are twice as stressful. Most money experts advise you to have 3 to 6 months of expenses in your savings account for these occasions.

However, even if you already have a comfortably padded savings account, you should set aside even more money during the pregnant months. Having a child will increase your monthly expenses. In fact, according to CBS, the average cost of raising a child is $14,000 yearly. The best time to add to your savings is before your baby is born.

Build a Budget

Children are expensive, which is why creating a budget is key. Some studies have found that parents who do not plan their spending run into financial issues around when their child turns 6 months. This can put a serious strain on your relationship.

Before you have your child, keep meticulous track of your spending to help you identify where you can cut back. Then estimate how much your child care expenses will be, this includes items such as diapers, clothes, formula, and toys as well as larger one time purchases such as the crib and stroller. To make things easier, try using the baby cost calculator at Babycenter.com.

Crafting your budget provides a great opportunity to evaluate if it is more beneficial for you or your spouse to stay home. Child care such as babysitters and daycare on average cost around $200 a week. Crunch the numbers to see what makes the most sense for your family.

Prepare for the Worst

Though it may be unpleasant to think about, you need to make sure that your child will be taken care of if something were to happen to you. Time magazine encourages couples to sit down together and have a serious discussion about estate planning.

Take a serious look at all your assets and create an itemized list of what you would like to go into the will. Do not forget to include investments such as property or art and retirement and savings accounts. To get an accurate measure of their worth, you may need to bring in an appraiser. You could also calculate the value of your home by looking at similar homes in your area and what they recently sold for.

Now is also the time to update your beneficiaries, write or adjust your will, and invest in life insurance. Taking these steps now will save your family members a lot of grief, stress and confusion in the event of a worst-case scenario.

 Invest in Their Education

It is never too early to start planning for college. The earlier you start saving, the better. Treat their college fund as an investment and set up their savings in a college savings plan in their name. These are designed to make sure your child does not miss out on financial aid or end up owing thousands of dollars in taxes. Instead, this money will go directly toward their education.

Get Ahead of Schedule

The sooner you establish a financial plan for your family, the more relieved you will feel. Money problems are often cited as the number one stress factors between couples and this only amplifies when you have a child. Take the time now to come up with a successful money strategy so that you can later enjoy your time with your new baby.

Photo courtesy of Pexels.