Smart Financial Moves to Make as New Parents
Starting a family brings heightened responsibility that cannot be toyed with. Apart from the joy of bringing new life into the world, parenting requires financial realities on this lifelong journey. 2021 CPAG statistics say it now takes £71,611 to raise a child if both parents are still together. On the other hand, the cost for single parents is higher and pegged at £97,862.
Considering that the estimated costs exclude council tax, childcare, and accommodation, you will find it helpful to learn more about some intelligent financial moves. In the meantime, what have you done to secure your financial future and your baby’s? Here are some smart money moves to adopt as new parents.
Create a will and trust
Usually, this is not an area new parents tend to look at, but it is crucial to do so. Besides, creating a will and a trust stems from the fact that you will not be around forever, so you must do the needful to secure your child’s future in your absence. Sometimes, a Living Trust is the best way to go because of the flexibility it offers. Remember that what you do now must strongly be built on or around the future and securing it in times of need.
Get a life insurance policy
New parents usually do not consider the vast benefits a life insurance policy provides, much like the will and the trust. The fundamental element of a life insurance policy is to secure the future of your loved ones (in this case, your children and spouse), especially regarding financial stability. Insurance providers estimate your current age against your monthly income, not forgetting the number of years you have left before retirement (when your regular income ceases) to determine the right policy for your family.
To secure a life policy, you must first assess the options available to you, thoroughly explained to you by the provider. More importantly, if you want the best value and coverage, it would be best to compare insurance packages before settling on one. Furthermore, always remember that any premium cost or package will depend on the following factors:
- Your age at the time of taking the life policy
- Health status
- Lifestyle (whether or not you smoke, obese, etc.)
Plan for your child’s education
Quality education doesn’t come cheap, and the moment you get that, you’ll place more priority on saving up towards your child’s education. Before your child gets to the university, you would have spent hundreds of thousands of Pounds in their schooling. Meanwhile, the cost of tertiary education does not come cheap either. So what you do now with your finances will significantly impact your child’s educational options when they reach the higher education level.
Do your best to get your finances well-managed as you plan for the future. Indeed, nobody has control over future occurrences, but fortunately, there are worthy interventions you can take now to mitigate dire financial challenges. Moreover, you will not be around forever, which is why you cannot take anything to chance.