Becoming a parent for the first time may be the most exciting (and scariest) time in your life, especially for your finances. Between diapers, day care, extra life insurance, and saving for college, there’s really no way around this fact. Kids cost money!
Since your little bundle of joy probably won’t come with a bundle of cash, it’s time to childproof your finances and prepare for your growing family. Here are four quick financial tips to get you started.
Tip 1: Update Your Budget.
Many parents think big when they have a child. Bigger car, bigger home…you get the picture. But you may need to think differently unless your income is also getting bigger. Start by getting a handle on what’s coming in and what’s going out. Then use resources like baby cost calculators and new parent workshops to help make estimates on what changes you’ll need to make. It’s wise to do this before your baby arrives.
Also try not to overdo it in the baby stuff category. Your love isn’t measured by how much you spend.
Here’s a great idea. If your baby is not due for a while, now could be the best time to give these budget changes a test drive. Not only will this help you ease into your future financial reality, it will help boost your bank balance before the baby arrives.
Speaking of money in the bank…
Tip 2: Build an Emergency Fund.
Experts recommend saving three to six months of living expenses for emergencies. This tip can take on even more importance if your household income will be reduced once the baby arrives. Unexpected expenses are almost never-ending. Just ask anyone who has children.
If you need a little extra cushion in your bank account, consider holding a garage sale to make room for new baby things and pick up some extra cash.
Tip 3: Review Your Life Insurance.
Life insurance is a financial protection measure for your growing family. If your spouse is eligible, he or she is automatically issued the maximum Servicemembers Group Life Insurance (SGLI) coverage of $400,000. There is no need to apply. Additionally, you could be eligible for as much as $100,000 through Family Servicemembers Group Life Insurance (FSGLI). While this might seem like a lot of coverage, you may need more. Consider things like debt to be paid off, income to be replaced, final expenses, and education goals when determining how much coverage you need. Now is also a great time to review your beneficiary designations for each life insurance plan.
Tip 4: Prepare an Estate Plan.
While you’re at it, make sure that you and your service member each have wills, the correct powers of attorney and letters of instruction. Naming a guardian for your new child in your will, should something happen to both you and your spouse, is a key component to estate planning with minor children. Estate plans bring peace of mind. Discuss all of this with your partner so you can both be on the same page.
Be Ready for Baby
That’s it! If you’re planning on having a baby in the military, keep that budget up to date, build an emergency fund, and review your life insurance. While it may not be possible to be fully prepared for the changes a baby brings, these tips can help strengthen your financial position before your new bundle of joy arrives.
For more information, visit Create a Budget, Save & Invest and Insure Your Family from the Money Ready section of this website. You may also visit Military OneSource Parenting and Children-Benefits.
Are you ready to join the mission?
MilSpouse Money Mission® is a Department of Defense resource that offers FREE personal financial education specifically geared toward spouses. There is a Money Ready guide for various stages of financial life, a MilLife Milestones section to help you through the big moments in your military journey, a blog, spouse videos, quizzes, calculators and more!
Join the mission to lead your family to a stronger financial future. Get started, here! Connect with us on social media and share this post.
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Becoming a parent for the first time may be the most exciting (and scariest) time in your life, especially for your finances. Between diapers, day care, extra life insurance, and saving for college, there’s really no way around this fact. Kids cost money!
Since your little bundle of joy probably won’t come with a bundle of cash, it’s time to childproof your finances and prepare for your growing family. Here are four quick financial tips to get you started.
Tip 1: Update Your Budget.
Many parents think big when they have a child. Bigger car, bigger home…you get the picture. But you may need to think differently unless your income is also getting bigger. Start by getting a handle on what’s coming in and what’s going out. Then use resources like baby cost calculators and new parent workshops to help make estimates on what changes you’ll need to make. It’s wise to do this before your baby arrives.
Also try not to overdo it in the baby stuff category. Your love isn’t measured by how much you spend.
Here’s a great idea. If your baby is not due for a while, now could be the best time to give these budget changes a test drive. Not only will this help you ease into your future financial reality, it will help boost your bank balance before the baby arrives.
Speaking of money in the bank…
Tip 2: Build an Emergency Fund.
Experts recommend saving three to six months of living expenses for emergencies. This tip can take on even more importance if your household income will be reduced once the baby arrives. Unexpected expenses are almost never-ending. Just ask anyone who has children.
If you need a little extra cushion in your bank account, consider holding a garage sale to make room for new baby things and pick up some extra cash.
Tip 3: Review Your Life Insurance.
Life insurance is a financial protection measure for your growing family. If your spouse is eligible, he or she is automatically issued the maximum Servicemembers Group Life Insurance (SGLI) coverage of $400,000. There is no need to apply. Additionally, you could be eligible for as much as $100,000 through Family Servicemembers Group Life Insurance (FSGLI). While this might seem like a lot of coverage, you may need more. Consider things like debt to be paid off, income to be replaced, final expenses, and education goals when determining how much coverage you need. Now is also a great time to review your beneficiary designations for each life insurance plan.
Tip 4: Prepare an Estate Plan.
While you’re at it, make sure that you and your service member each have wills, the correct powers of attorney and letters of instruction. Naming a guardian for your new child in your will, should something happen to both you and your spouse, is a key component to estate planning with minor children. Estate plans bring peace of mind. Discuss all of this with your partner so you can both be on the same page.
Be Ready for Baby
That’s it! If you’re planning on having a baby in the military, keep that budget up to date, build an emergency fund, and review your life insurance. While it may not be possible to be fully prepared for the changes a baby brings, these tips can help strengthen your financial position before your new bundle of joy arrives.
For more information, visit Create a Budget, Save & Invest and Insure Your Family from the Money Ready section of this website. You may also visit Military OneSource Parenting and Children-Benefits.
Are you ready to join the mission?
MilSpouse Money Mission® is a Department of Defense resource that offers FREE personal financial education specifically geared toward spouses. There is a Money Ready guide for various stages of financial life, a MilLife Milestones section to help you through the big moments in your military journey, a blog, spouse videos, quizzes, calculators and more!
Join the mission to lead your family to a stronger financial future. Get started, here! Connect with us on social media and share this post.
