You’re pregnant! Congratulations! Your life is about to change in a big way. And with that comes the responsibility of making sure you are financially ready for these changes. Ergo, it’s essential to be smart about your money, so you don’t find yourself living paycheck-to-paycheck or worrying about not having enough saved for retirement. This blog post will explore some strategies to help secure your finances as a parent, including:
Accelerate Your Debt Repayment
You’ve got a baby on the way. You’re excited, but you might also be feeling overwhelmed by your fresh addition to car payments or mortgage. Unfortunately, this is not an uncommon situation. So, it’s good for savers and investors alike to have emergency funds set aside for job loss and educational expenses.
Here are some ways to accelerate debt payment before the baby arrives:
- Save up money for emergencies -This can include having enough cash saved to cover things like unexpected medical bills (e.g., if maternity leave leads to becoming sick) or sudden changes in income due to unemployment.
- Get help from family members – It may be possible to receive help from family members, such as grandparents or friends, who may be able to loan money for the down payment on a house
- Debt consolidation – If you have more than one type of debt (credit card bills and student loans), paying off your existing balances with a line of credit can provide relief immediately.
- Get a loan – Consider Buddy Loans to help you secure a future for your baby. You can use the loan as a down payment for a mortgage or rebuild your credit history.
Consider a 529 Plan
A 529 plan refers to the plan available in each state to help you save for your child’s education. The plan allows parents and other relatives to set up an account worth a certain amount of money, which you can use tax-free for specified expenses, such as tuition or school books.
You may be wondering how to prepare for kids and the future financial expenses. Well, a 529 plan is one of the simplest ways you can make sure your children’s college education or other qualifying educational costs are taken care of.
A 529 plan is also flexible regarding what it covers, from private elementary school tuition to graduate programs as long as they’re related to higher education!
A 529 plan is also a great way to save for retirement. You can use up your tax-advantaged contributions on the account as well as any earnings.
Because you choose what goes into the investment portfolio of your child’s 529 savings plan, there are no worries about not meeting your child’s future needs.
Increase Your Retirement Savings
The number one thing you can do while pregnant to prepare for kids is increasing your retirement savings. Allocating just a little bit of extra money in the form of an IRA contribution or through other means such as investing in stocks or funds will help you have enough saved up when it’s time to stop working and start taking care of your children.
And because many employers allow 401K contributions before taxes, this is another way you can get ahead on saving for later life.
In conclusion, kids are expensive, so you must prepare for their arrival financially. It’s also a good idea to have an emergency fund in place before the baby arrives because no one knows what will happen with health costs or how tight money might get.
Lastly, take care of yourself while pregnant by eating right and getting plenty of rest if possible. This ensures that there won’t be any emotional roller coaster when the baby arrives, affecting your capabilities.