Finding out that you are going to become a father is a momentous occasion. While you may have visions of taking your son out to the ballpark or your daughter to her first dance recital, you also need to plan on how you are going to handle the finances that come with this new responsibility. Here are three ways to prepare financially for fatherhood.
Increase Your Budget
As Simple advises, you should not discount the power that kids have to increase the demands on your budget. While the costs may not be too significant at first, that will change quickly. One of the biggest costs that you will likely incur is either daycare payments or the loss of one income so that a parent can stay home with the infant. In addition to the cost of diapers and all of the gear that comes with having a baby, you also need to factor in hospital costs and other miscellaneous expenditures.
Buy Term Life Insurance
With the arrival of a new baby, you have more than just yourself to think about now. You’ll need to start thinking about your baby’s future and how they’re going to be taken care of if something tragic should happen to you. You’ll want to start thinking about your new life insurance needs even before the baby is born. According to Murfreesboro Insurance, life insurance premiums are much cheaper when you are young, making this the ideal time to pull the trigger on a new policy.
Plan for College Expenses
While it may seem like a lifetime away, it is never too early to begin thinking about college expenses, according to Ivywise. College is a costly venture, but you can make it more manageable if you begin saving as early as possible. Although you should not put off saving for your own retirement in order to pay for college, it is important to save as much as you can as early as you can. There are various programs you can utilize that will also provide tax benefits. If you are unsure of the best use of your money, a financial advisor can help you to sort through all the options.
Becoming a father comes with a long list of new responsibilities. Prioritize the financial issues that are the most urgent, and then begin planning for the future. You will sleep better at night if you know that you have a good plan in place for your growing family.
Here’s another article you might find helpful: What to Keep in Mind When Bringing Home Baby From the Hospital