There are a lot of important decisions that you will have to make as a new parent – one being how to plan your budget. There are several important financial decisions that you need to consider.
Get Life Insurance And Disability
You probably already know that it is important to have health insurance. However, it is just as important for you to have disability and life insurance. Life insurance will ensure that your family is still taken care of if something happens to you. Disability insurance will cover you if you become ill or disabled and are unable to work.
Create a Budget
You are probably well aware of the fact that having a child can be expensive. One of the best things that you can do to prepare for the expenses is to set a budget. This will ensure that you do not overspend and have enough money for the extras that your baby needs.
Increase Your Emergency Fund
There are a lot of unexpected things that can happen. For example, you could lose your job, get sick or have another big unexpected expense. It is a good idea to have at least three months of expenses in your emergency fund. This means that if you have $3,000 in expenses each month, then you will need to have at least $12,000 in your savings account.
Take Advantage of Your Tax Breaks
Even though having a child can be expensive, you may be able to take advantage of the tax breaks. For example, if you will need child care, then you can get a Child And Dependent Care Credit. It can cover anywhere from 20 to 35 percent of your child care expenses.
You may also be able to use a flexible spending account. This is a program that you get through your employer. You can set aside up to $5,000 per year to cover your child care expenses. You can use a child and dependent care credit for children up to the age of 13.
Don’t Rush to Buy a New Home
When many people have a baby, they automatically decide to buy their first home or move into a larger one. However, depending on your circumstances, that may not necessarily be the best decision. You will have to save up for a down payment and pay for moving costs. Ask to speak with an Eastex Mortgage Loan Officer to discuss when is the best time for you to buy a new home.
Meet With a Financial Planner
It is possible for you to budget and plan for your financial future on your own. However, it will be a lot easier for you to budget if you meet with a financial planner. They can help you plan for major investments that you may have to make, such as paying for your child’s college. Your financial planner can also help you plan for your retirement.
Your child will not go to college for several years. You may not be able to retire for several years. However, the earlier you start, the better. Being a new parent can be an exciting adventure, connect with the professionals at Eastex CU to limit the hurdles.