Having a baby is an exciting milestone. But did you know that it costs about $233,610 to raise a child?! That is not even taking into account college expenses. Here are a few tips for all those new parents and parents-to-be as you embark on this exciting new life chapter.
- Consider opening an investment account for your child. Instead of relatives buying a lot of clothes and shoes that your baby will grow out of in a matter of months (or even weeks), ask them to contribute to your child’s investment account. This will give your child a head start with investing so they can reap the benefits of the compound growth associated with the stock market.
- Consider making significant revisions to your monthly budget; if you do not have a budget, this is an optimal time to create one. Plan for at least a 10% increase in expenses. To help prepare for those additional expenses, cut back significantly on unnecessary expenses such as streaming platforms and cable television.
- Review your estate plan. Be sure to appoint a guardian for your child in the event something happens to you. The guardian is the person who will have legal custody of your child and control over any assets left to them. Speaking of assets, this is also the time to make sure you update the beneficiaries on your 401(k) plan and life insurance policy.
A strong financial foundation will go a long way toward helping you support your new child.
This information in the Financial Tips section is provided for educational purposes only and is not tax, legal, financial planning or investment advice. Neither the information nor any opinion expressed in this section constitutes an offer to buy or sell any securities or advisory products. The information provided is general and is not information reasonably sufficient upon which to base an investment decision and should not be considered a recommendation to purchase or sell any particular security. You should not regard this information as a substitute for the exercise of your own judgment. Investing involves risk.