by Stacy Francis, CFP®, CDFA
Shopping for my new baby earlier today, I met two very anxious soon-to-be mothers. Talking to them made me realize how much easier it is to be pregnant the second time around. Not only am I more relaxed about everything, but I also know what needs to be done, both around the house and financial planning-wise. For those of you still on your first child (or planning to have one in the future), below are five crucial things to ask yourself during those first, tired months to make sure you are on track.
- Have you updated your will to include your newborn? Many new parents have neither wills, nor have never seen the need for them in the past. With a little one to care for, this all changes.
- Have you set up a college savings plan? I am aware that college is eighteen years away. But as I have mentioned before, due to the concept time value of money, no dollar is going to make more of a difference than the ones set aside early in your child’s life.
- Have you acquired life insurance? True, it is unlikely that you and your spouse will die in the near future, but accidents do happen and you will sleep better at night knowing that your baby would be provided for in your absence.
- What about disability insurance? The thought of becoming disabled is no more pleasant than the one of dying, but since it will be many years before your son or daughter will be able to support him or herself, you need to be prepared for everything.
- Have you factored in the increase in your cost of living? There are cheaper and more expensive ways to raise kids. From helpful grandparents to nannies, hard-working parents to stay-at-home moms, the cost can vary widely, but according to statistics, the average cost for raising a child in the US is $250,000.