The estimated annual cost to raise a child is $11,610 to $13,480 for an average-income family. This cost doesn’t include college education, or the forgone wages and benefits one or both parents might incur while raising a child. So if you’re expecting a child, or one was just born, it’s time to do some serious financial planning.
Get That Social Security Number You’ll want to get a Social Security number for your child as soon as possible—not because he or she is going to work soon, but because the number will entitle you to several tax benefits that will help defray some of the child-rearing costs.
Review Employer Benefits & Paychecks Consider increasing the number of allowances you check off on your W-4 form at work by at least one or two. This will increase the amount of your take-home pay in response to the increased deductions you’ll receive for the child. Add your child to your health insurance plan, and review possible plan changes.
Revamp Insurance Increase your life insurance to provide for the future needs of the child in your absence. If you don’t have adequate disability insurance, and many people don’t, beef that up.
Write or Review Your Will You’ll want to designate a guardian for your new child in your will in the event that you and your spouse die. Discuss who you would like to care for your child, and then talk it over with the person to be sure they’re willing and able. You also may want the will to establish a trust to manage estate assets for your child should both of you die before your child is old enough to manage the inherited assets.
Start Saving If you weren’t saving or budgeting before, definitely start now because big-ticket expenses will grow with a new child — a larger home, a bigger car, medical expenses and so on.
Start Saving for College Like any form of investing, the sooner you start the less you need to invest in order to reach a specific target. That’s because the power of compound earnings grows stronger the longer the time horizon.
INSPRO Insurance can help you with Financial Services and planning for your future.
INSPRO Lincoln 1919 South 40th Street P.O. Box 6847 Lincoln, NE 68506 Phone: (402) 483-4500
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