Having a Child
Having a Child — How Changing Diapers May Change your Financial Planning
Everyone should consider setting up a household budget to track spending and keep debt under control. But when you have a child, you definitely can benefit from the discipline a budget gives you, because many of your expenses,including food, housing, utilities, transportation and medical costs, are probably going to go up.
Having a kid changes everything - from sleep patterns to financial priorities.
Setting up an emergency fund
To help protect your family against unexpected expenses like illness, an accident or a job loss, put some money into an emergency fund. Generally, your emergency fund may vary, but should be a minimum of three month's. Try not to let this interfere with your retirement savings. Both are important, but if you have to prioritize, build your emergency fund first.
Saving for college
Along with saving for retirement, saving for your child’s education may be a big long-term financial goal. And like retirement planning, the earlier you start, the more opportunity you have for your savings to grow through compounding. You can put money away in a dedicated savings or investment account or invest in a 529 college savings plan.
With the added responsibility of a child, you may need to buy a policy or increase your existing life insurance and disability insurance protection. Consider pruchasing insurance, especially since insurance is particularly important if one spouse stops working to care full time for the children. Also, make sure your health insurance adequately covers the entire expanded family.
Insurance can provide financial protection for your family if something happens to you, but you also need a solid estate plan to make sure your wishes will be carried out. At the very least, you should draw up a will that names a guardian for your child. Depending on your assets, you may consider setting up a trust for more flexibility in protecting your child’s interests. This is also a good time to review your beneficiary designations on retirement plans and insurance policies.
Time to get serious about planning
Having a family changes your perspective on life. Your desire to make sure your family is protected against anything you can imagine is strong. We can help you financially prepare yourself.
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ING and ING representatives do not offer legal or tax advice. Seek the advice of an attorney or tax advisor prior to making a legal or tax-related decision.