Having children is an incredibly beautiful thing - one that changes your life forever. The parental instincts kick in; you become a nurturer, a protector and a provider for your little bundle of joy. This is a very exciting journey to take, but also a very expensive one, which means that it should be done in consultation with a financial advisor - just to make sure you have covered all the bases.
Having a baby is wonderful, but it comes with many, many extra costs which come into play before the baby is even born. Therefore, I would encourage you to review your budget and, if necessary, start cutting costs where possible in order to accommodate the extra expenses that will be introduced when the baby is born. A good place to start is paying off all your short-term debts and cutting expenses that are not required. When the baby comes, you should have a budget for them that can be incorporated into the overall family budget, just so that you can track all expenses and make provision on a monthly basis.
Financial Needs Analysis
Every parent wants to love and protect their children, and that means being financially stable enough to provide for them under any circumstances. It’s a good idea to ask your financial advisor to do a Financial Needs Analysis for you to review your financial position in the event of death, disability and dreaded disease.
When it comes to providing for our family, we want to do so even after death - and not necessarily from old age. In the event of your death, you’ll want to make sure that there is adequate life cover to take care of the living expenses, education and medical aid of your family. The financial needs analysis will determine the amount of life cover that is required in order to take care of the children’s needs.
Accidents happen, and in the event of disability, you’ll want to make sure that your income as a parent is protected in order to provide for the little one. You need to make sure that you have an adequate disability lump sum, and income protection cover to protect you and your family.
In the event of dreaded disease, your family might be faced with additional cost which might affect the family’s finances. Therefore, having this cover is important for you and your family. Some insurance companies also cover children.
Need to save for your child’s tertiary education
I know initially I mentioned cutting costs, but saving for your children’s education when they are still young makes financial sense. The cost of tertiary education is very expensive, and parents want their children to have a decent education and this can be done by introducing this saving from early. You can start with a little and increase as the years go by, instead of putting away a much bigger amount later in life to cover the shortfall.
Updating of Will
You need to update your Last Will and Testament to make sure that the baby is included and that you have nominated guardians and trustees that you would like to handle the affairs of your baby, should something happen to you.
Every parent wants the best for their children. Thus, it’s crucial that you consult a financial advisor to assist you with everything we’ve discussed. As parents, when the children are born, we get so excited and can easily forget to go back to basics, which is why the service of an advisor will serve you well. Financial advisors will make sure that your affairs are in order when it comes to your family, so you can keep them protected and comfortable - no matter what. And isn’t that what family’s all about?