New parents have a lot on their minds. They are busy with a new baby and some things may just slip their mind. Raising kids is rather expensive, and some new parents could be surprised, especially in the first year, about the costs. This is a good reason why new parents need to save money.
The government has estimated that a fourth a million dollars is what it takes for a middle income family to raise a kid. This is a lot of money. Many new parents know that raising their child is going to be expensive, but are shocked at just how expensive that first year can be. Websites such as Babycenter.com have a calculator that can help you to calculate what the expenses will be for the first year of your child’s life.
New parents need to start a savings safety net. No one knows what is going to happen in the future, so it is very important to have a safety net for emergencies. It is recommended that new parents have six to nine months of savings in the event of an emergency or if one or both parents lose their income.
Creating and sticking to a budget is very important. This aids in saving money. Many new parents do not know just how to get started with their budget. Do research, there are many blogs and resources to help you create your budget, but then you need to stick to the budget.
No one, especially a new parent, wants to think about an untimely death. For the child’s sake however, they need to. They must get life insurance to help pay for the funeral and to make sure their family will be ok. The next thing is to get a will. Determine who you want to have custody of the child should both parents die.
When a child is born the parents cannot request a social security number for the child unless it has a name. So while pregnant it is important to decide on a name. You cannot open a savings account under the child or claim them as a dependent on your taxes without a social security number. This means it is best to have a name picked out before the baby comes, so when the baby does come they can immediately request a social security number for the child.
Do not forget to continue saving for retirement. While the baby will add expenses, you should still put what you can in a retirement fund. This will help later in life when you want to retire, you will be able to do so more comfortably, and it will set a good example when the child gets older.
Also once the baby is born you should start saving for college. College is very expensive so you really cannot start saving too early. This will help when the child goes to college; they will have more money to pay for college, and will not need as much in student loans.
There are many things that a new parent should do to save money. When the baby comes it can be a very chaotic time. However, if new parents stick to these tips they can save more for retirement and college, which most definitely helps in the long run.