Many new parents find it hard to focus on the big picture, especially when there are so many details demanding their attention. You may be juggling feedings and naps, and you might lack sleep because of the time spent taking care of your new child. However, it is still important to manage your finances well during this critical time. There are several things you may want to look to keep your finances on track.
Focus on Savings
You may find it difficult to focus on your savings when you have the added expense of a new child in your family, but it’s especially important to make sure you are setting aside money for your future. You never know when an expense might come up, and you want to make sure you will be prepared to cover it. If one parent stays home, they may consider taking on some part-time, remote work to increase your household income.
If you are the full-time income earner, you might look for ways of increasing your overall income. You may consider looking for other opportunities that pay better. Getting a degree in your field could open more opportunities for you. While paying for school can be expensive, you can use online search tools to find scholarships you might be eligible for.
Protect Your Family with the Right Insurance
Having good health insurance will help cover the expense of your child’s medical appointments, but that’s not the only kind of insurance you should consider. You should also consider getting disability and life insurance. You can use life insurance to pay for things you would like your family to receive, even if you are no longer there to provide for them. If you passed away suddenly, life insurance could be used to pay off the mortgage or cover daycare or school for your kids.
You may want to consider disability insurance as well. If one of the income earners is unable to work because of an injury or illness, disability insurance can help significantly. Your employer may provide some coverage, but make sure it would be enough to cover your living expenses, including childcare, schooling, mortgage, and other expenses, for long enough. You can get individual policies to supplement the coverage you already have. As you shop around for this, know some policies might only pay you benefits if you are unable to work at all. If you currently work from home and receive a physical injury that allows you to continue working, you may not receive a payout from this type of insurance.
Set Aside an Emergency Fund
An emergency fund allows you to plan for a rainy day, which becomes even more important when you have kids. An emergency fund allows you to pay the necessary expenses if you lose your job or face an unplanned expense. It can also help with medical bills if your child becomes sick. Generally, you will want to have several months of living expenses in your fund. Because it is unlikely you would face a situation where you would need the funds the same day, you can keep the money in a high-yield savings account and transfer it to your checking account if needed.