According to one study, 76% of expectant parents said they feel financially prepared, but 41% of new parents admit that, in hindsight, they were not.* If you feel less prepared for parenthood than you do for the classroom, you may want to spend some time reviewing your finances. As you anticipate the arrival of your baby, include the following in the preparations.
Build a nest egg to help tackle fast-growing baby expenses. You might also want to begin saving for college tuition, with tools such as a 529 plan or Coverdell education savings account.
Update your insurance coverage. Review your disability and life insurance. Examine your health insurance, as well, to be sure your plan provides the best family medical coverage available. Keep in mind that having a baby or adopting a child is a qualifying event for many plans and could provide an opportunity to apply for coverage. Some health plans require parents to notify the plan, usually through the employer, of the birth of a child or adoption in order to enroll them for coverage. Failure to do so could jeopardize health care insurance coverage for your child.
Plan for the unexpected. Ensure your child’s welfare by making a will naming a guardian and reviewing the beneficiaries on your financial accounts. You may also want to sock away extra money in case a parent who intends to return to work decides to stay home instead – and research daycare costs, in case the opposite happens.
Plan for your leave and potential loss of income. Depending on your career plans, you may be out of work for some time. If you are anticipating having a family, consider applying for CTA-Endorsed Voluntary Disability Insurance Coverage, which can help cover any loss of income during your pregnancy leave.
* Source: Visa U.S.A. news release, February 13, 2006.