BOISE, Idaho — Becoming a parent is a wonderful experience, especially for the first time. But tack on the costs of financial worries and you have the makings of a very stressful first few years.
However, Certified Financial Planner Charlie Pastor says there are ways to be preparedbefore that new addition to the family arrives.
“Two things that new parents should be prepared for,” said Pastor, “are dealing with insurance and budgeting going forward with a new mouth to feed.”
Pastor adds that when it comes to a new baby, paying attention to your insurance is important to understand how it will play into the delivery process, specifically what it will cover.
You should also add your new child to your insurance within 30-60 days after birth, and needless to say, you’ll need to adjust your budget.
“Consider new recurring expenses like funding for diapers, childcare, and extra food,” said Pastor. “As any parent will tell you, plan to spend more than you expect.”
You’ll also want to focus on saving for both the short-term and the long-term. In the short term, you’ll want to build up an emergency fund, cut unnecessary expenses and consider the cost of child care. Experts say you should do the math to figure out if it might be cheaper for Mom or Dad to be a stay-at-home parent for a while.
When it comes to long-term savings, Pastor suggests you consider using a 529 college savings account to start planning a way to pay for future higher education. These plans are set up on a state-to-state basis so you’ll need to be aware of how it works in your state of residence.
“Be sure to be in touch with the Department of Treasury or your local bank branch in order to understand what college savings plans are available to you in the state of Idaho,” Pastor said, “and how best to fund and use them in the future.”
Going back to basics is a good way to get caught up once the baby is born, and you can do that by using a budgeting app to track your spending and adjust as needed.
