This is a guest post by Nick Smith. Read more about him at the end of the post.
The addition of another family member brings new personal and financial realities into focus and as you embark on this life-long journey, having your finances well managed and your financial investment well planned will be assurance for the present and a foundation of confidence for the future…
1. Create a Will and Trust
Nobody really likes to think about it, especially connected with the joy of welcoming a baby to the family, but none of us can predict the future so it’s essential to draw up a will that will provide for the care of your child both financially and physically. Many people go a step further and create a living Trust which gives more flexibility over how and when their assets are distributed.
2. Re-assess your Insurance Coverage
Whether you did or didn’t have life insurance when it was just you and your spouse, with The new addition it’s become essential to make sure you have adequate life insurance should you or your spouse pass away. Would the remaining parent have enough to cover raising the child? Life insurance exists to protect your loved ones who are dependent on you financially if something tragic were to happen.
3. Education Planning
Begin saving your baby’s education. The cost of raising a child to the age of 17 has never been higher, often into the hundreds of thousands of dollars and that’s still before establishing an education fund toward college. If this aspect of your finances is planned well, your child will have the freedom to choose their school and will have every possibility and opportunity open to them. As Ben Franklin said “The only thing more expensive than education is ignorance”
4. Establish an Emergency Fund
Use some of your financial resources to put away and emergency fund that won’t be touched except in case of, you guessed it, emergency. Short term financial needs can arise for any variety of reasons and you need to be sure you can handle what life brings without dipping into your longer term investments.
5. Continue Funding your Retirement
Are you looking forward to a wonderful retirement without financial worries? Make sure your existing pension and retirement plans fit well with the new financial responsibilities of starting your family so that you can not only enjoy the present, but be confident in your future.
It’s not easy making sure that all moves are in place and properly chosen and understood when you’ve just become a new parent, which is why I strongly recommend you contact experts such as the professional and experienced consultants to help properly tailor your new parent portfolio.
If you have loved ones that are financially dependent on you, the actions that you take regarding your finances will affect their lives in a significant way. You never truly know what will happen in the future, which is why planning for both the known and being ready for the unknown, to protect your family and dependents is of utmost importance at this special time in life.
About the Author:
Nick Smith is a Wealth Managing Partner in Taylor Brunswick Group. A Hong Kong-based wealth-management firm that offers expert wealth management advice that will increase the potential to maximize growth for any individual or business.