The USDA estimates that you’ll fork out about $250,000. That’s just basic needs, excluding the cost of college. It's a lot! But with the steps below, you can create a solid financial foundation for all your kids.
Here’s how to prepare for the financial impact of a new baby:
Your Home and Car
Your lifestyle will change as your child grows. Assessing your financial goals early on will save you stress down the road. First, consider whether your current home suits where you’d like to raise a family. Are you in a good school district? Will your child have plenty of neighbors of the same age? Do you have enough space? Do you want a yard? Make a list of your home must-haves and start looking early. As for your car, it may be time to trade that sporty coupe for a four-door hatchback with the latest safety features. Get ahead of these changes and you’ll be glad you did!
Bringing a new life into the world is the last moment you’d likely think about death. But as you gaze at your beaming newborn, consider life insurance as an easy way to help secure their future if you were to pass away unexpectedly. Would your partner be able to support your child alone if you were no longer there? As a young, healthy parent, you may qualify for an affordable term life policy today to support your surviving partner and children.
Not sure how much coverage you need? First, calculate your current income - including your salary, investments, and savings. Then subtract your debt - household bills, student loans, and credit card balances. Also subtract any childcare or educational expenses, as well as an allowance for the unexpected. The amount of coverage you will likely need is roughly ten times your annual income.
Protecting your next bundle of joy doesn’t have to be a long, drawn-out process either. Take advantage of Ethos’ term life insurance calculator to get a quote that fits your budget in just minutes.
As new parents, it might be surprising to find out what your current health insurance plan doesn’t cover. For example, if you’re under 26 years old and on your parent’s insurance, delivery and newborn care may not be covered.
Gone are the days of simply opting into your employer-sponsored plan. Think about whether your existing health insurance can meet the need of your new child as well as any siblings you may want to bring into the mix. To prepare for your new child, check-in with your insurance provider regularly to avoid out-of-network expenses and other surprise bills when possible. If you’re unclear about any part of your health insurance plan, the best thing to do is call and ask your provider.
Maternity and Paternity Leave
While subject to change, the Family Medical Leave Act of 1993 (FMLA) requires US companies with over 50 employees to provide eligible employees with 12 weeks of unpaid leave. If your workplace doesn’t qualify or offer this type of leave, you may want to gear up for those weeks without the income you’re accustomed to. This could mean careful budgeting, extra hours at work, saving vacation time, or all of the above. In addition to the minimum support required by law, consult your company’s benefits administrator to make your benefits, paid leave, and extended time off work for your new additions. Whatever your situation is, make sure you understand your rights and talk to your employer about your options.
Free and Second-hand Items
Babies grow up fast and before you know it, that onesie you bought will be too small. Garage sales and discount stores are great places to score affordable decorations, clothing, and toys. Keep your eyes open for deals before your baby arrives and you’ll spend (and worry) less later on. For safety and sanitary reasons, it may be better to buy some items new. Items such as car seats, cribs, and strollers have evolved over the years - so you’ll likely want to stick with what meets current safety requirements.
How do I get started?
There is no hard and fast deadline for new parents to secure their future, but the earlier they start, the better. With a few simple choices, you can help protect your income and your family’s future if you unexpectedly pass away.
Purchasing a term life insurance policy is a fast and simple way to help ensure that your newborn’s dreams are protected. What parent doesn’t want to walk their child to their first day of school, hand them the keys to their first car, and even plan their wedding? With an affordable term life insurance policy, you can help them to achieve these goals and more should you pass away unexpectedly. Contact Ethos today to get started.