Family finances: Planning for your future
Whether you are a new parent or hope to be one soon, there is no time like the present to plan for your family’s finances. Here are a few ideas to help you get started.
Allocate a portion of your budget to building an emergency fund. Start by accumulating one months’ worth of income, then increase it, as you are able, to cover three to six months' worth of your take-home pay.
Create a budget and stick to it.
Develop a family budget that takes into account current living expenses, plus new-baby-related expenses. Besides ongoing costs such as health insurance, doctors' visits, diapers, formula, food, clothing, daycare, and so on, factor in one-time costs for outfitting the nursery and stocking up on baby gear. Here* is the potential cost of having a baby, from pregnancy to your baby’s first birthday.
It is never too early to start saving for education, and the earlier you start, the less you will feel the impact to your income.
Ensure you continue to fund your retirement. Skimping on contributions to save for future expenses can be detrimental to your retirement.
Be smart about benefits.
Contact your human resources department to determine what changes you are allowed to make after welcoming a new child into your family.
Although you may not want to think about worst-case scenarios during such a happy time, you can rest easier knowing your family will be taken care of if you are not around. Be sure that you are adequately covered, as well as getting a will drawn up.
*Source: Keong, E. (5 November 2018). Can you afford to have a baby? www.freemalaysiatoday.com