The birth of a child is a joyous thing. However, this period in life often comes with a great deal of exhaustion, uncertainty, and fear. Parents need to take important financial steps to ease their minds when it comes to their finances and being able to provide for their children. The following are steps every parent should take when expecting a child or immediately after having one.
Establish an Emergency Fund
Life remains full of surprises. When a child is added to the family, the surprises multiply. Every parent has had a child stick a toy down the toilet, fall and chip a tooth, or become ill, requiring the parent to miss time from work. These unexpected events don’t have to break the bank if the parents have an emergency fund in place. Experts recommend having six to eight months of expenses in a special account. The funds should only be used for true emergencies to ensure the credit card doesn’t need to be pulled out when disaster strikes. WECU helps parents establish this fund and can make recommendations on how to build the savings.
Update Your Budget
New parents need to update their budget to account for child-related needs. For example, babies use approximately 3,000 diapers before they reach their first birthday. Expect to spend around $350 on diapers each year if you use coupons and shop sales. Pay full price and see this amount go up considerably. Furthermore, this doesn’t take into account the baby wipes, diaper cream, and clothing the child will go through in the first 12 months alone. Look for discount programs to save money on essential items. They become of great help in keeping these necessary expenses under control. Visit https://www.wecu.com/ for help with your budget.
Add the Child to Your Health Insurance Policy
Insurers responsible for covering the mother during her pregnancy should be aware of when the child is born. However, parents cannot make this assumption and should call the insurer to add the child to the health insurance policy. Fortunately, most companies offer a 30 or 60 open enrollment period following a qualifying event such as the birth of a child. If the parent contacts the insurer during this period, any medical bills incurred from the child’s date of birth should be covered. It’s best to learn how to add the child before he or she is born, as this makes the process easier when the time comes to ensure your new bundle of joy has the coverage they need.
At this time, parents should also update their tax withholding to include the new dependent, make a will to protect their child in the event of their untimely demise, and open a college savings account. With the rising cost of higher education, it’s never too soon to take this step. By preparing early, you can set your child up for a great future, which is what every parent wants for their little one. If you need help in doing so, reach out to a financial pro at https://www.wecu.com/contact-us/.
WECU, a Bellingham, Washington-based credit union, currently serves more than 132,000 members and maintains over $2.1 billion in assistance. The credit union employs 415 workers and gave approximately $5,000 to community groups and local nonprofits in 2020.