Photo by Carlos Muza on Unsplash
Raising a child can cost around $233,610 from birth to age 17—and that’s not including any expenses you might plan to cover after high school, such as four years of college or even a wedding down the line. With such a hefty price tag attached, parenthood can be a great motivator for reevaluating your money situation and taking steps to solidify your family’s finances.
Here are a few steps I recommend every new parent take if you haven’t already:
Update health insurance.
Within the first 30 days of your child’s life you should add them to your health insurance plan. In a few cases you might have up to 60 days to complete this task—but this is not a task to put off until the very last minute. Be sure to read up on your particular policy so you don’t miss the window.
Invest in life insurance.
No one really wants to think about dying, but parents have to consider grim what-if s to ensure their children are provided for. There are a lot of different kinds of life insurance to accommodate all kinds of situations, even for people with serious medical conditions. Take time to research the options and pick one that fits your family’s needs.
Start a college fund.
You may not be able to pay for all of your kid’s college semesters, but if you start early by opening a 529 you will be able to set aside a substantial amount by the time they turn 18. Even a small sum will get your child that much closer to a valuable education.
Save for retirement.
If you haven’t already set up a retirement savings account, don’t procrastinate any longer. This step may seem less relevant to new parents because it’s not directly related to providing for your children, but the more savings you have available when you leave the workforce, the less you will have to lean on your grown kids for support—sapping up their own finances.
Financial stability tends to be a long process rather than a single task to check off a list, and these first few steps are just a foundation that you will be thankful for later.