We have a baby. An 11 week old baby. Totally dependent on us for her daily needs but also dependent on us for her future. Daunting, isn’t it? It’s time. It’s time to re-evaluate our finances and start saving for her future. They say that you can never start too soon. Trying to get our ducks in order, here’s what we are in the process of working on:
1. Change our Life Insurance Policy. What we currently have on file is not enough now that there’s a child in our family. If you don’t have a life insurance policy – please make this happen asap. Term Life Insurance is inexpensive. Currently, Derek and I are paying about $20 a month for both of us to be covered. Yes, you may never need life insurance but if something were to happen to one or both of you it could make the difference between surviving and extreme financial stress and ruin.
2. Open an Education Fund. In Canada, this could be an RESP (Registered Education Savings Plan) or take the form of another type of savings account or investment. This is one area where every little bit counts and if you start early, your child reaps the benefit of all those years of interest.
3. Write a Will. When you have a child it’s important to have a Will that outlines your wishes re: legal guardianship. If something were to happen to both parents, the Will would help family members know who you’d like to raise your child, what you’d like done with your money and belongings, etc.
4. Start saving now for ways that you’d like to support your child as a young adult. This could be to help pay for their wedding, a down-payment on a house, etc. Yes, these are luxuries but if you put a little away now it can reap huge benefits in 20 years. For example, if you were to save $50 a month over the next 20 years, you’d have $12,000 + interest!
5. Get good at Budgeting. Clothing and other Children’s items can really add up. Find ways to save such as second hand shopping or only getting something if it’s on-sale. Curbing impulse buying now can help ensure there’s more funds available for your child’s future. My mother made us wear hand-me-downs and while I didn’t like it at the time, I’m so glad that she did. She was saving money for our future and as a result, I was able to attend my dream school.
Have you started to plan for your child’s financial future? Do you have any tips to add to this list? I’d love to hear from you!