Yay! You’re going to be a parent!
That old saying that “there’s never a ‘right’ time to have a baby” really is true.
But you can make some sound financial choices to help ease the anxiety of having your first child, or your second, or even your sixth (bless you!).
Here’s eight smart money moves to make when a new baby is on the way:
- Create a tiny nest egg for your tiny human. Setting aside just $45 a month (about $10 a week) in a basic savings account can add up to about $10,000 by the time your child turns 18. Or start with a lump-sum deposit. Put that money in other more higher-bearing interest or investment products such as certificates or mutual funds and your bundle of joy could soon have a bundle of cash.
- Start saving for college. A great option for preparing for education expenses is an Education Savings Account which you can usually open through your financial institution. Other popular choices are a 529 Plan or prepaid tuition plans, which are typically administered by the state or university system, and are offered by Navy Federal Financial Group. All three of these plans come with tax benefits, and require little to no “maintenance,” especially if you set up automatic deposits. Ease of use and no stress for new parents? Check!
- Encourage grandparents and other family members to contribute to the college fund or savings account, instead of giving gifts at holidays and birthdays. Yeah, they’ll still want to load your little cutie down with toys and treats, but they’ll also love the idea of adding to something more long-lasting!
- Utilize apps and rewards programs to get discounts from your favorite stores and brands. Diapers and wipes and cute little baby clothes, oh my! But the cost of raising a baby can add up fast. Apps from your favorite stores and brands not only help make life easier, they also hook you up with coupons and special discounts. Also plan out your grocery shopping to make the most of your money and your time.
- Decide how to handle maternity leave. If you have a job will you (or your spouse) take time off when the baby comes? How much leave are you entitled to and will you get paid for any of that time? Have a discussion with your supervisor and HR manager as soon as possible after announcing your pregnancy. You don’t have to decide anything then and there, but find out what your options are for leave so you can start to plan accordingly.
- Make sure you know how a new baby will affect your taxes. You may qualify for new credits or deductions, and you may want to change your withholding amounts.
- Get your ducks in a row in case the unthinkable happens. This is adulting at its max. That means life insurance, wills and naming a guardian for your child. If you already have life insurance, review your policy and make sure the coverage is enough to provide for your growing family, and find out the process to add the baby as a beneficiary. No one likes to talk about the worst-case scenario, especially not in the midst of such a fun occasion, but life insurance is one of the best gifts you can give your family. The bright side of this gloomy topic? The younger you are, the cheaper it will be. Navy Federal Financial Group, for example, offers several life insurance options for both active duty and civilian members.
- Consider consulting a financial planner. It’s always a smart idea to have a professional on your side, and a financial planner can help you with every stage of this crazy life called parenthood.
Navy Federal Credit Union is federally insured by NCUA.