Financial stability is a great goal when growing your family. Although you might already be saving for retirement, there may be extra steps to take when adding a new member to your household. Let’s look at 3 tips to help you prepare financially for a baby.
1. Pay down high-interest debt
It’s a good idea to pay down credit card balances, to the extent you’re able, before adding to your family. Growing your family comes with added expenses, which could make it more difficult to pay down lingering debts.
2. Save for an emergency
Consider building an emergency fund that could cover necessary expenses for 3–6 months. Then, try to continue saving 5% of your income for any unexpected expenses that come up, like car repairs or having to replace an appliance.
3. Think about child care and education costs
Child care is a big expense. Given all the financial juggling you may need to do to make it work, saving for higher education may not be a priority. But saving for college early can really help later. Time is one of the most important elements in a long-term saving and investing plan. Just saving a little bit on a consistent basis can help you get closer to your savings goals.