One thing everyone can agree on is that bringing a baby into a home means things are going to be changing. Babies, as wonderful as they are, have mastered the art of draining the financial resources of their parents. They can accomplish this with no more effort than it takes to sap their parents’ energy.
Looking into the rabbit hole
This is why it is important for parents to start early to safeguard their finances. Too many parents make the mistake of neglecting their financial planning goals to focus on baby, then abandoning their safe investing practices in a flurry to “catch up.” You don’t have to fall into this particular rabbit hole, however. With a little planning and a bit of discipline, your family can grow while still remaining financially sound.
The steps to keeping your family’s finances on track are easily accomplished. If you aren’t confident in your understanding of things financial, your first move will be to invest in information. Read websites and news articles on investing topics to bring yourself up to speed on how money makes the world go around.
Let your budget be your guide
Hopefully, you were working within an established budget before baby came along. The addition of your bundle of joy means things have to change, including household budgets. It won’t take long after baby comes home for you to get a good idea of how much you’ll be spending on baby. Then it will be time to create a new budget to reflect these additional expenses.
We all know that having an emergency fund on hand is an important step toward protecting our families. We also know we can easily fall behind on building or maintaining that fund when our family is growing. Three to six months’ worth of living expenses is generally what most people consider to be an adequate emergency stockpile.
Just as you pad your child’s crib to prevent injury, you need to pad your emergency savings fund to make certain you can protect your family should hard times come along. Even a few dollars a week more into the savings fund can make a difference when an emergency rolls in.
When you’re engrossed in providing for your family, from the daily expenses to feeding your child’s college education savings, don’t forget your own retirement. You’re talking about your future quality of life; this is not the place to take huge risks on the hopes of a fantastic return. You wouldn’t gamble with your child’s future so make certain you aren’t gambling with your own, either.
Safe investing over the long haul is the preferred course of action for young parents when setting financial goals for family growth and parental retirement. Make certain you’re doing your due diligence when managing your retirement fund, taking only the risks necessary to ensure you and your spouse have adequate savings and income streams in place when you decide to retire.