BABY ON THE WAY? Here's How to Prepare Financially
Smart steps for growing families: financial planning for life’s biggest change
If you are expecting a baby, or have recently adopted one into your family, you have likely begun making big plans for the future. One of the most important aspects to consider while preparing for your new arrival is how your financial habits, responsibilities and goals might change. Here are six things to consider:
Reevaluate Your Goals
Parenthood often shifts both short- and long-term financial goals and priorities. From childcare to college, expenses can add up quickly. Consider working with a financial advisor who can help you adjust your goals and create a plan that grows with your family.
Anticipate Lifestyle Changes
Daily routines and spending habits will evolve. Budget for outings, hobbies, and rising childcare costs. Whether you opt for daycare, a nanny, or other care options, make planning for this expense a priority. Thinking of a major purchase such as a home or car? Consult an advisor to weigh the timing.
Childcare costs may drop with public school, but private school and college can be expensive. Consider utilizing a 529 plan, a saving option for educational expenses.
Revisit Career Plans
A new child may prompt changes in your work life like seeking a promotion, switching jobs, or reducing hours. If you are thinking about changing your job status, consider how the move may affect your paycheck, retirement savings and benefits, and any available family leave.
Start Saving For Education
Childcare costs may drop with public school, but private school and college can be expensive. Consider utilizing a 529 plan, a saving option for educational expenses. You may withdraw up to $10,000 in federal income tax-free per beneficiary, per year to pay for kindergarten through 12th grade tuition at a public or private school1. If funding education costs is important to you, it’s never too early to start saving.
Prepare For The Unexpected
Build an emergency fund in the case of unexpected expenses and update your estate plan and insurance policies to ensure your beneficiaries are current. No one wants to think about the worst-case scenario, but planning is crucial. Additionally, having updated legacy documents is critical to ensuring your child is best taken care of should the unexpected happen.
Define Family Values
Decide how you’ll teach financial responsibility. Will you give an allowance? What money values do you want to pass down? Aligning with your partner early helps set clear expectations and ensure you are on the same page.
Talk to a Financial Advisor
Expanding your family brings new priorities. A financial advisor can offer personalized guidance, help you navigate decisions, and ensure your financial plan supports your growing family.
Korrie Frank, CFP®, APMA® is a Financial Advisor and Financial Planning Specialist with River Prairie Wealth Partners, a private wealth advisory practice of Ameriprise Financial Services, LLC. in Altoona, WI. She specializes in fee-based financial planning and asset management strategies and has been in practice for 7 years. To contact her, www.riverprairiewealthpartners.com or 715-832-7715 or 1520 Front Porch Place, Altoona, WI, 54720.
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River Prairie Wealth Partners
Address: 1520 Front Porch Pl., Altoona
Phone: (715) 832-7715
Website: RiverPrairieWealthPartners.com
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