Finding out you’re going to be a parent for the first time can be a source of a lot of anxiety amid joy. You want to be a good parent, and you want to make sure that your child has a stable, secure life. If you’ve never been especially great with money, you might be wondering just how you can ensure that this is the case.
Have a Budget
If you’ve never had a budget before, this is the time to start. You need to make sure of a few things: that you are living within your means, that you have or are building an emergency savings fund that includes enough to cover basic expenses for a few months, and that you are paying down debt. You can use an app to help you track your spending and budget based on that, or you may want to make a spreadsheet. The mechanism is not as important as making sure that it works for you and that you’re consistent. Be sure to build some indulgences into your budget; it isn’t supposed to put you into a straitjacket.
Buying a Home
You don’t have to buy a home to be a good parent, as millions of parents and kids raised in rentals will assure you and as you may well know yourself, but it can be a great long-term investment that gives you and your family more security. However, the process of purchasing a home can seem impenetrable to the first-time buyer, and this can be particularly true in an ever-changing housing market. You can review a guide that explains more about the different types of lenders and programs for loans available and how your credit score is determined, which is a vital factor for a lender to determine the risk. This can help you figure out what types of loans are best for you and your family and how to proceed.
Making an Estate Plan
Once you have kids, you need to make sure that they will be okay even if something happens to you. Even if you have few assets, there are a couple of documents that you need. One is a will. With a will, you can name a guardian for your child, saving family members from going through a potentially expensive and emotionally draining court process. With a life insurance policy, you can ensure that there is money to support your child until adulthood. When deciding how much cover to buy, be sure to calculate not just the years until your child turns 18 but also whether there are other expenses you want to cover, such as college costs.
While creating financial stability within your family is an important step for security, teaching your child about money so that they can do it, in turn, is also crucial. Money can be a fraught, emotional symbol of other types of dysfunctions within a family, so by talking about it naturally as a useful tool and helping your child develop skills in managing it as they grow up, you can help prevent this. You’ll also give your kid a great foundation for money management in their own life.