Financial decisions can often feel overwhelming, from building a secure foundation to managing insurance and estate planning. But with careful planning and practical tips, you can confidently embark on this journey.
An easy way to save and invest for the future
Here are the top financial to-dos for new parents:
- Get life insurance: Aim for 10 times your gross salary saved, with term insurance generally recommended over permanent insurance.
- Update/Create an estate plan: Include a will, power of attorney, updated beneficiaries, medical directive, and potentially a trust.
- Start saving for college: Investing around $500/month from your child’s birth can cover the cost of an average public university.
- Freeze your newborn’s credit score: Prevent identity theft by freezing credit with Equifax, Experian, and TransUnion.
- Update your health insurance: Add your newborn to your plan and consider lower deductible options.
- Research tax benefits: Explore credits like the Child Tax Credit and Child and Dependent Care Credit.
- Update your budget: Factor in childcare, newborn essentials, healthcare, housing, and adjust discretionary spending.
- Increase your emergency fund: Ensure you have three to six months of expenses saved.
Preparing for your newborn’s needs involves careful consideration and planning. Each family’s situation is unique, but starting early and seeking professional advice can lay a strong financial foundation for the future.
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