Many couples feel that adding children to their home will complete their families. A child can be a joy, but raising a child in today's world can be costly. Experts estimate that it can cost as much as $12,800 to $14,970 annually per child for a two-parent household to provide basic living expenses.
Being financially prepared to support your future children is important if you want to avoid the money-based stress that having a child can produce. Use these helpful tips to start planning for your child's financial future now.
1. Invest in life insurance.
Having a life insurance policy can be a great way to protect your child's financial future. If you or your spouse were to die while your children are still minors, the surviving spouse might have a difficult time making ends meet.
A life insurance policy provides financial protection for your family in the event of an unexpected death. Be sure that your policy coverage will provide adequate compensation to cover living costs, educational costs, and potential medical expenses as your children age.
2. Start a savings account.
An estimated 70% of Americans have less than $1,000 stocked away in a savings account. If you want to be prepared for a future with children, you will need to start learning to save money now.
Children bring with them a host of unexpected expenses. Not only will your living costs increase as the number of mouths that you need to feed rises, but your children might need braces, eyeglasses, or money for school trips. Having a healthy savings account will allow you to cover these added costs without creating financial hardship for your family.
3. Create a college fund.
Sending your children to college is a great way to ensure that they are able to secure a good job in the future. Unfortunately, tuition costs will only continue to increase over the years. Planning now for the educational expenses associated with college enrollment will help you spread the cost of your children's college education over the course of their lifetime.
A financial adviser can evaluate your budget and assets to help you select the right savings plan. You can choose from a 529 plan, a taxable account, or tax-exempt municipal bonds to help you adequately plan, prepare, and save for your children's college education.
Financial planning prior to the birth of your first child shouldn't be overlooked. Schedule an appointment with an experienced financial adviser to learn how you can start preparing for the cost of having children.
Share27 March 2018
After we bought a house, I started realizing that we were going to need to learn to save a little money. We had become pretty laid back about spending because we were so accustomed to making so much extra each month, but with a mortgage, we found ourselves running out of money on a regular basis. I decided to get real about our finances, which is why I set up a financial plan to stick with year round. You wouldn't believe how much of a difference that simple plan made. We went from scraping together money to head to the grocery store to sticking with a rock solid budget.
