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It’s common for parents-to-be to feel overwhelmed by the responsibilities that come with having a new child. The very idea of caring for an innocent and fully dependent human life is enough to make anyone question their own capabilities. Rest assured that no person is ever ready for the transition into parenthood; it’s just something that you’ll learn along the way. Instead of overthinking and worrying, you should focus on factors you can control, like your finances.
Your cost of living is going to change overnight when your baby finally arrives. To put yourself in the best position possible, be sure to optimize the health of your finances as well as your physical well-being by considering a few of these tips from Fatherhood: Reloaded.
Update Your Life Insurance Policy
When you’re in a relationship, a term life insurance policy is enough to protect your significant other in the event of an accident. However, you’ll want to switch to a whole life policy when you become a parent. In order to determine your rates, Good Financial Cents explains insurance companies will require a blood test to get a feel for your overall health. Although these tests are quick and painless, the results do have an impact on the premiums you’ll pay. If your blood pressure or glucose and cholesterol levels are out of control, companies count you as a higher risk.
Make sure to get regular exercise and eat healthy for several months before the test. But staying fit and active doesn’t end there. A balanced diet and overall wellness can alleviate the stress of new parenthood, so be sure you don’t neglect self care while you raise your child. Get as much rest as possible, establish and stick to an exercise regimen, and be cognizant of what and when you eat.
Start Saving for College
College is probably the last thing you think about when preparing for your newborn to arrive. After all, worrying about something 20-plus years down the road seems impractical when you have immediate responsibilities. That said, it’s never too early to start saving. With college prices continuously on the rise and the need for higher education becoming more stressed, NPR notes that it greatly behooves parents to do a little college planning before the new family member arrives. Even saving a small portion of your paycheck will make a massive difference down the road. Look into tax-incentive programs like 529s for even more benefits.
Find a Manageable Mortgage
A first child usually marks the transition for many couples from apartment life into suburbia. This means scouring the market for a home and negotiating a reasonable price. New parents also need to find a manageable mortgage that won’t put too much financial stress on their monthly income.
Many new home buyers choose to take out FHA loans because they have more lenient lending requirements, and you may be able to put as little as 3.5 percent down. Just keep in mind that the less you put down, the more your monthly mortgage payments will be. Regardless of the specific details, it’s critical that you land on a mortgage that you can handle without running the risk of defaulting on payments or going into bankruptcy.
Business Owners: Make Sure You’re on Top of Your Taxes
If you own a business, there are also things you need to take care of. According to ZenBusiness, you need to ensure you’re legally registered with the state to help separate your business finances from your personal finances. Additionally, it’s important to stay on top of your quarterly tax payments so that you stay in good shape with Uncle Sam. Falling behind in your taxes can result in late fees and penalties, which can cause your payments to balloon. And when you’re a new parent, the last thing you want is to spend more money.
Having a child is a massive life-changing experience that brings about some significant financial shake-ups. Taking care of these items before your baby arrives will give you more time to focus on the things that really matter.