There are few events in people's lives that have a more profound impact not only on your lives, but on your finances, than the arrival of your first child. Here are some financial tips for new parents:
- Still need to live within your means.
- Take care of paperwork such as life insurance. In the event something unfortunate happens to you, only life insurance can provide financial security for the baby. Also important to take care of basic estate planning like appoint a guardian, update beneficiaries, prepare a will.
- Create an emergency fund. It's recommended to set aside 3-6 months of worth of savings.
- At work, take a look at flexible spending accounts - it can save you 25% or more on your medical expenses. These accounts allow you to set aside a portion of your earnings to pay for qualified medical expenses. These expenses not subject to payroll taxes so results is usually payroll tax savings
- Pay off excess debt or consolidate debt if possible. If you can clear debt and get finances on the right track, would help clear your mind and will make the arrival of baby an even more joyous occasion.
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