By Kris Louis
Kris Louis is mom to two rambunctious boys. Her oldest is 10 and her youngest is 7. A former advertising copywriter, she recently created parentingwithkris.com, where she puts her skills to work writing about the trials and tribulations of parenting. Kris, her husband, and two boys live in Durham, NC.
Everyone knows that parenthood changes lives in many ways. Aside from sleepless nights spent beside the baby and the emotional growth parents undergo, new parents are pushed to reevaluate their priorities, financially and otherwise, upon the arrival of baby.
Instead of just getting by or buying whatever you want when you want, your baby’s existence will move you to provide comfort for the entire family now and in the future — and it’s not cheap. According to Investopedia, new parents can expect to spend more than $20,000 in the first year of a baby’s life. Raising a child and living a comfortable life together is more than possible, though, when a financial plan is in place. Start making your own financial plan today by following the steps below, presented by Zazo Dream.
Before diving into dollars and cents, take some time with your partner to lay out goals for the future. All short-term and long-term financial goals should be included here, so nothing is left unaccounted for. You might want to contribute 6 percent to 401k while your partner would rather pay off your auto loans.
There is no question that these goals are important, and you both want to start saving for your child’s education. However, if you’d like to take the family on vacation every year for a week, write this goal down, too. Always have at least one “want” in your list of goals as a way of rewarding your hard work, suggests Credit.org.
This last suggestion is for business owners: If you haven’t registered your business with the state, now’s the time to do so. Registering as an LLC, for example, will provide you with tax advantages and protect your personal finances should something happen to your business — which is essential in protecting your financial future. If you don’t have any experience in this department, there are companies that can help you get started.
You have to know the direction you wish to go before setting out, but this list of goals can always be amended later on. Think of it as a living document that will change along with your life’s circumstances.
The next step in creating your own financial plan is figuring out where each of your accounts stands, so you can monitor your progress toward reaching each and every goal you and your partner set together. It’s a simple step, but it can be time-consuming.
List your debts from least to greatest and refresh your memory for the interest rate on each one. If you freelance for all or part of your income, make sure you remember to list the self-employment tax as well. With all of the numbers now at your fingertips, sit down and map out your goals.
Now you can create a budget and start making changes to improve your financial health. A stricter budget will get you reaching your goals in no time, but which ones? With a complete budget showing how your money is being used, you can then reorganize goals.
Maybe you’ve budgeted to pay the minimum amount on all of your debts. To save more in the long run, it might make more financial sense to pay off one or two debts faster. While it’ll cut into any spending money you have leftover each month, you could save hundreds of dollars in interest each year.
As you adjust your budget, continue reviewing your goals as time goes by. Situations change frequently, and you need to be flexible to meet new goals, like college tuition.
After all of your hard work bettering your financial situation and raising your child, do what’s necessary to protect them both. Invest in your child’s future and consider purchasing term life insurance policies for both parents.
All life insurance policies protect your family’s finances if something were to happen to you, which is why so many parents invest in them. A 20-year term life insurance policy is a perfect option for new parents because it offers affordable pricing and coverage spanning a kid’s entire childhood. Purchasing a term life insurance policy is a way for you to provide for your child even in death.
Finally, develop an estate plan to finish your financial plan. After accumulating assets your whole life, a will and a living will ensure that they are distributed how you want them to be. Preparing for the inevitable and the unexpected will ensure your family is taken care of, no matter what.
Check out Kris’s other blog here on zazodream.com that provides essential resources parents need for every stage from toddlers to teens.
Image courtesy of Pixabay.
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I Have an Etsy Store & Books
Zacai Etsy store offers boys clothing, digital downloads, & more. I made over 100 sales! Very humbled and grateful for the support!
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Tag @zacaikids in the photo of you or your little one wearing a product from my store.
I have two children’s books that are available on Amazon Kindle, Audible, and paperback.
I Can Count on Spring is a beautifully illustrated eBook that encourages children to observe the wonders of springtime. I Can Count On Spring introduces the numbers from 1- 10.
Sensing Summer is a children’s book about the five senses while discovering the beautiful summer season.
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