It’s wrong to think of a new child regarding their financial circumstances, and of course, you won’t. You’ll just be excited by the little bundle of joy that’s on its way into the life of you and your partner. But the fact of the matter is, a new baby will have a significant impact on your finances, and as such it’s important that you sit down to see how you’ll adjust your finances once your new child is with you. Below, we take a look at four actions you should take when you learn you’re expected another child.
Reevaluate the Goals
If you’ve been taking care of your finances, then you’ll already have a financial plan and goals. That’ll need to be rewritten now, as you have a new person who will be relying on your financial support and stability. Once you’ve factored in the cost of raising a child, reevaluate your goals. You might want to put more money away for your child’s tuition, or savings, and this will have to be brought in line with your existing financial goals.
Aside from your savings and financial hopes, you’ll need to think about any practical concerns you’ll need to account for. For example, it might be that you have to view homes for sale if your current abode will no longer be big enough for your growing family. You’ll need to weigh up the needs of you and your family, and then find a place to live that meets these requirements. You may also need to buy a more family-friendly car, especially if this is your first child. Finally, don’t forget the cost of babyproofing your home.
No Nasty Surprises
Parents can sometimes underestimate just how costly a baby can be. As such, it’s important that you’re the victim of a nasty surprise once your child arrives. To avoid this from happening, make a budget for everything you might need for a new child; and then multiply it by another quarter. There’ll be no way you’re able to budget for every eventuality, especially as there are many hidden costs of a new child, so you’ll want to give yourself some wiggle room when it comes to your budget.
Automate Your Savings and Investments
Some parents can get some preoccupied with their new child that they forget to keep an eye on their other financial goals. You’ll be too busy with sleepless nights and the like to stay on top of your finances. Therefore, it’s a good idea to automate your savings and investments so that they keep ticking over even when you don’t have the time to take care of them manually.
There’s no getting around the fact that a new child will cost you a lot of money. However, with a little bit of sensible preparation, you can make sure that you’re able to take the new financial reality in your stride. With that taken care of, you’ll be able just to enjoy all the joys of having a new baby in your life!