Piggy bank wearing glasses in a classroom

We’re starting a family

There’s nothing more exciting than the news your family is about to get bigger. Although it’s exciting and rewarding to be parents, keep in mind the added expenses you will be facing. Of course, there are added expenses like food, clothing, and doctor’s bills, but there are other things to consider, such as health and life insurance. And, though it may seem a long way off, there’s also the cost of college. Make sure you have a plan in place to handle it all because your child’s future depends on you.

 

 

Prepare financially – There are lots of one-time expenses such as a crib, a stroller, a car seat, and more. But don’t underestimate the ongoing increase in everyday expenses like baby formula, diapers, clothing, and, of course, child care. A solid savings and investing plan can help you handle these, as well as future needs.

Assess health costs – Count on additional doctor visits and other health-related expenses, both during the pregnancy and after the baby arrives. Also, consider there could be additional premiums as you add your child to your company health plan.

Evaluate life and disability insurance – Having the right insurances can help replace the loss of income in the event something should happen to either you or your spouse. By planning now, you can ensure your family will have the money necessary to replace an income, pay off debts, or even pay for your child’s future education.

Plan for college – Research shows tuition costs continue to rise at a rate of six percent annually. Covering those costs means starting your savings/investment program while you still have the power of time and compounding interest on your side. The Coverdell Education Savings Account (CESA) allows you to contribute up to $2,000 a year and grow your account free from federal taxes. Plus, distributions from your CESA are tax-free when used to pay for college.

Tie up loose ends – With such a big change in your life, it’s important to update all of your important documents. Ensure you make the appropriate changes to the beneficiaries of your life insurance policies, retirement, and other accounts. Plus, you should establish or update your will to accommodate for your new child.

The information provided in these articles is intended for informational purposes only. It is not to be construed as the opinion of Central Bancompany, Inc., and/or its affiliates and does not imply endorsement or support of any of the mentioned information, products, services, or providers. All information presented is without any representation, guaranty, or warranty regarding the accuracy, relevance, or completeness of the information.