You welcomed an amazing child into your life and it has changed your world forever. There’s another human being in your family and they depend on you. Actually, it’s more serious than that, they depend on you for the next 18 or 21 years of their life!
Parents must recognise that life changes with your first baby. We’re going to discuss some important things you need to put in motion as soon as possible when becoming a parent. No, this doesn’t include obvious steps – like installing baby gates or getting a crib – it’s more to do with the long-term financial implications of starting a family.
Create a will
You’ve created life, but ironically you need to start thinking about the end of life. Before now, you probably didn’t think about a will. You weren’t overly bothered with where your money and assets go when you pass – but you should be!
Particularly now there’s a child involved. We’re hopefully talking about a situation many decades in the future, yet you need to ensure everything is prepared. Draft a will detailing where you want everything to go, so you can sleep peacefully knowing that your child will be financially stable if anything bad happens. When the time comes, they can enlist the help of a deceased estate lawyer to divvy everything up and get what you left them.
Take out a life insurance policy
Yes, we’re still talking about the D word (death). It’s part of life and there’s no hiding from it, so you may as well prepare as best as you can. Obtaining a life insurance policy will give your family added protection if the worst happens.
They receive payments following your passing, helping your partner cope with a loss of income or giving your child additional money to aid their life. Remember, we’re setting plans in motion for decades away. Your child will be grown up – and may have multiple siblings by then – but the sooner you set things in motion, the sooner you can relax and forget about them.
Set up a savings account
All parents should focus on saving money for their family in multiple ways. Yes, you want to reduce regular expenses, but you also must build wealth for your kids.
Set up a savings account as soon as they’re born and make regular deposits. You’ll find a multitude of kid’s savings account options out there, a lot of which stay operational until your child becomes an adult. After which they can take the money and transfer it to a current account.
If you put £10 a week in this savings account, you’re saving £520 a year. Multiply that by 18 and your child will have £9,360 saved. Think about how useful this will be when they go to university or want to move out and find somewhere to live. It could help them afford a home deposit by the time they’re in their early twenties!
Put these three things in place the moment you become a parent. Plan ahead and you leave your family in the best financial position come what may.