Planning for the birth of a child is an exciting yet stressful time. Along with the fun of picking out a name for your baby and shopping for baby clothes comes the realization that you’re now responsible for a new life. You’ll naturally start thinking about what kind of life you want your child to have, and you’ll need advice about financial matters, insurance, and estate planning.
When you have a baby, it’s a good time to review or make a budget. Your day-to-day living expenses may increase dramatically, while your income may decrease if you stay home with your baby temporarily or permanently. Your savings plan may change as well if you decide to save for your child’s education or put a portion of your money into an emergency fund. In addition, having a child often affects your taxes positively. Due to the increased exemptions, deductions, and credits you may be able to claim, you may find yourself paying less income tax in the future.
New parents need to protect their families by reviewing their current life, health, and disability insurance, making sure that their current policies are adequate, and purchasing additional insurance if needed.
Planning for your child’s future in the event that you die is crucial. You’ll need to draw up or revise your will, nominate a guardian for your child, review your beneficiary designations, and make sure that your assets are distributed according to your wishes. You may also want to set up a trust to ensure that estate funds are used to benefit your child
If you’re working, you and your partner (if any) may need to decide whether either one of you wants to stop working temporarily or permanently once your child is born. Either of you may be eligible for short-term paid or unpaid leave from your employer, or you may be able to take up to 12 weeks unpaid leave under the Family and Medical Leave Act of 1993. If you decide to work after the child is born, you’ll need to investigate child-care options, perhaps even before your child is born. You may also want to consider if it would be better economically for one parent to stay at home with the child.
It’s important to remember to apply for a Social Security number for your child as soon as possible after he or she is born because you’ll need the number to fill out your income tax return for the year. In addition, you’ll want to apply for a birth certificate. Many hospitals now routinely allow you to apply for these records before you leave the hospital with your child and will file the paperwork for you.
At Henssler Financial we believe you should Live Ready, which being prepared for your expanding family. If you have questions regarding the financial planning required when having a child, the experts at Henssler Financial will be glad to help. You may call us at 770-429-9166 or email at experts@henssler.com.
Disclosures
The following information is reprinted with permission from Forefield, a division of Broadridge Financial Solutions, Inc. This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
