Start Parenthood With These Financial Planning Priorities

Many people talk about financial planning as if it’s something you can do one time and forget about, but financial planning should really be a lifelong process. Major life events change your financial outlook and priorities, which is why it’s smart to reevaluate at those times. Starting a family is perhaps the one change that has the greatest, most significant impact on our lives. Whether you have thought about money goals in the past or you’re just starting to think about it, check out the top financial planning to-dos that should be on any parent’s checklist.

Update Benefits

If you have a good benefits package through your employer, you’re most likely already enrolled in their health insurance program and contributing to a retirement account. The great thing about these benefits is that they can usually be extended to families. For example, most health insurance policies give you a 60-day window after having a child to add them to your policy. 
Fatherly recommends taking advantage of this enrollment window to make changes to accounts like a Health Savings Account (HSA) or a Dependent Care Flexible Spending Account (DCFSA). This is your chance to make sure your child is covered and that you’re taking full advantage of these tax-free savings options.

Evaluate Insurance Coverage

Along with making sure you have expenses such as healthcare and child care covered, it’s also important for parents to think about protecting their family in case of an unexpected event. This is why many people purchase or re-examine their life insurance when they start a family, something Nolo explains is a must-have when you have children. To determine how much coverage you need, consult with an insurance agent to make sure you choose the right policy to take care of your family. 

Set Long-Term Financial Goals

Most financial tips for new parents focus mainly on following a budget, but they don’t put as much emphasis on long-term financial goals. It’s important to get on solid financial footing by having a steady income, paying off debt, spending less, and following a budget — but don’t forget to plan further into the future, too. 

If you have the means, buying a home is one of the best ways to give your family stability and build wealth that will support your long-term goals. Even if you’re a first-time homebuyer and are unsure of the process, the best way to start is by calculating how much home you can afford and getting pre-approval for a home loan. 

You can also explore the many ways you can get a home loan as some are more friendly to your financial wellness than others. If you’re a veteran, for instance, you’ll find that VA mortgage rates are considerably more competitive than conventional ones. Most importantly, you may be able to completely forego the down payment requirement on a 30-year fixed loan. These figures change with the market, however, so make sure to stay updated on Guaranteed Rate. Then, you can begin the process in earnest by choosing a real estate agent and looking at home listings online.

Buying a home is a smart way to give your family the security of homeownership now while you’re building for the future at the same time. Two other major long-term goals you should think about are saving for your children’s education and saving for your own retirement. Most financial advisors will tell you not to ignore your own retirement savings in order to fund your child’s education. Instead, Mint explains that you should ensure you’re receiving 401(K) contributions from your place of employment. Then, contribute what you can to college savings and add extra to your retirement account whenever you get a raise or bonus.

Taking these important financial steps sets a good example for your kids, so why not take it a step further by giving them first-hand experience with money management by giving them an allowance? There are many benefits to giving your child an allowance, not the least of which is that it introduces children to the idea of money management. Yet some benefits may not be so obvious; for example, My Doh points out that children’s confidence may increase thanks to the pride they will feel for paying for things they want through their own efforts to earn some cash. With a little luck, using an allowance to teach your kids about money will help them become careful consumers when they are older.

Education, retirement — these things probably feel like they’re light-years away, but becoming a parent makes you see a whole new world of possibilities, ones that will be here before you know it. This is part of what’s so amazing about being a parent! What you need now is a solid financial plan that will turn those possibilities into reality.

Brad Krause is the founder of the website Self Caring. After spending most of his time in a corporate setting and neglecting his own self-care far too long, Brad embraced his calling and decided to become a full-time life coach. He now spends the rest of his life helping people get a better foothold on their wellness above all else.