4 money questions parents have, will help you navigate uncharted territory. Before starting a family, personal finances are easy. You pay your bills every month, send a little to savings, and when unexpected car repairs or other costs come up, you usually have enough to cover it. But after kids? That’s an entirely different story.
Having kids adds a lot of line items to your household budget. There’s not only more money going out, there’s also more to keep track of. It’s a lot to adjust to when you’re trying to figure out nap schedules and potty training at the same time. The worst thing new parents can do is avoid thinking about family finances.
Instead of letting financial anxiety get to you, face these big financial questions head-on. Even if it feels like every penny is already accounted for, these tips from The Incomplete Guide to Parenting will help.
How to Pay for Childcare
Childcare is one of the biggest expenses you’ll face as a parent. Out of the 4 money questions parents have they don’t usually include this one until well into the postpartum period. This is best planned for while still pregnant.
Before letting sticker shock scare you into quitting your job, weigh the full cost of leaving the workforce. While you might save on childcare now, you’ll miss out of retirement savings, wage growth, and more. You could even lose out on employee benefits like flexible spending accounts that help you save money on childcare.
See if you qualify for state subsidies and tax credits to offset the cost of childcare. Parents can also utilize alternative childcare like church-based daycares and nanny shares to save money over the cost of center-based care. If you can’t afford full-time care, consider working part-time, working from home, or flexing your schedule. Freelancing can be a great way to generate income on your own terms. Opportunities have exploded in the past few years, making it easy to find work that matches your skill set. Bear in mind, however, that you’ll have to pay your own employment taxes, and you’ll have to jump through different hoops for health insurance coverage.
How to Afford a House as a New Parent
Whether you need more space or want to avoid the hassle of moving every time your rent increases, buying a house is an attractive option for young families. However, rushing into homeownership could leave new parents spending so much on their mortgage that they can’t keep up with other expenses. Instead of buying a house as soon as there’s a baby on the way, spend time preparing your finances for homeownership. While it’s possible to buy a home with little or no down payment through certain loan programs, you’ll pay less in interest and fees if you make a larger down payment. Twenty percent is considered ideal, but any funds you can put toward the down payment will make you more attractive to lenders.
How to Pay for College
Every parent hopes to put their kids through college, but with tuition sky-high, is it realistic? While your child’s college education shouldn’t come before your own retirement, any amount parents can put away for college helps. However, parents shouldn’t just stash college savings in personal bank accounts. Putting your college fund in a Coverdell ESA, 529 plan, or even a Roth IRA will help your savings grow until it’s time for college.
How to Care for Your Kids When You’re Gone
The final thing new parents need to worry about is also the scariest. But while it’s hard to think about leaving your family behind, protecting against the worst-case scenario doesn’t have to be complicated. Writing a will is a simple step every parent should take. While online will makers can help you get started, it’s worth meeting with a lawyer to ensure you’ve taken the right steps to name guardians for minor children. In addition to writing your will, you’ll also need to buy life insurance for yourself and your spouse — don’t worry, it’s easy and affordable. While life insurance is especially important for working parents, even stay-at-home parents should have coverage due to the high cost of childcare.
Starting a family puts a lot more on your plate — and not just diaper changes and nighttime feedings. However, while thinking about family finances might not be the part of parenthood you dreamed about, getting these financial matters out of the way will help you enjoy parenthood knowing your family is taken care of.
Join me in a thank you for a great guest article by Leslie Campos at Well Parents
Thanks for the good article, I hope you continue to work as well.Спаситель на продажу