Adding a new child to your family brings a joy unequaled by most events in life. Whether you are having a baby or adopting a child, your daily expenses can increase along with your family financial planning needs.
While diapers and formula may be in the forefront of your mind, knowing what to watch for in your daily expenses will help you create a budget for your immediate expenses and help you focus on your future family financial planning needs.
- Add your child to your health insurance plan.
- Sign up or increase flexible spending account amounts.
- Review the number of allowances on your W-4 form.
Most employers allow changes outside the open enrollment period for changes in family status.
- Write or Rewrite Your Will
Designate a guardian for your child. Be sure that individual is willing and able to help if needed.
- Get Your Child a Social Security Number
A social security number may entitle you to tax benefits to help defray costs.
Your life is a flurry of activity with family and friends calling and stopping by to meet the newest member of your family. A new child enriches your life but also brings a new sense of urgency to family financial planning.
- Do you have enough life insurance now that a child depends on your income?
- Is your disability insurance sufficient?
- Would your child be able to attend college if something happened to you?
Family financial planning may derail by the unexpected death of you or your partner. A disability or illness could prevent you or your partner from working and side track your own retirement plan. You may need to expand your family financial planning to include increases in life insurance and disability insurance to help ensure financial security for your child.
Education funding is now a component of your family financial planning and may include a 529 college savings plan or a Coverdell education savings account. Northwestern Mutual can provide you with a copy of the College Costs brochure. The brochure is updated yearly and provides information on tuition, room and board, and other fees and educational costs.
Your family financial planning encompasses more than saving for a child’s education. Your own financial security is especially important to your child. You don’t want to burden your child with your future health care or housing expenses.
Most experts strongly caution parents against foregoing their own goals to pay for college. The long-term benefits you forfeit are irretrievable. With the amount of money available to students through grants, aid and scholarships, students have a greater chance of making up the difference for their college experience than you do in your retirement savings plan. Your retirement needs are an intricate part of your family financial planning.
From the first moment your child arrives home to college graduation, your family financial planning needs increase. With adequate life insurance, disability insurance, and other financial products from Northwestern Mutual, you can protect yourself from having to tap into your savings to cover unexpected expenses.
Coverdell education savings accounts, 529 college savings plans and retirement investment products can help round out your family financial planning to give your child the advantages of a bright future.