If you're considering starting a family, your focus may be on cribs, strollers and car seats. While all these items may be necessary, it's also important to make sure you are financially prepared. Here are a few financial preparations you may want to make before you welcome your bundle of joy.
Check your health care coverage
It's a good idea to check your health care plan's maternity and pediatric coverage. You'll want to know if there are any out-of-pocket expenses you should budget for. And to avoid a gap in coverage, find out if you need to add your child to your policy within a certain number of days of his or her birth.
Figure out child care
If one parent plans to stop working to stay home with the baby, you may need to adjust your spending now to accommodate a future change in income. If you intend to hire a child care provider, you may want to start your research well in advance since some providers have waiting lists. Also find out if your employer offers a dependent-care flexible spending account that would allow you to set aside pretax dollars for qualified expenses.
Do you have adequate disability income insurance?
Having a family means greater financial responsibilities. What if you weren't able to work due to an illness or injury? Short- and/or long-term disability income insurance could help replace all or a portion of your earnings for a period of time. If employer-provided disability income insurance isn't adequate, consider purchasing an individual policy.
What about your will?
It will be important to update your will to name a guardian for your child and provide instructions on who should manage any inheritance. Without a will, state law and a court might make these decisions.
Look at your life insurance
The U.S. Department of Agriculture estimates it could cost the average U.S. family about $235,000 (in 2011 dollars) to raise a child through age 17. And this estimate doesn't include the cost of college. You'll want to make sure you have enough life insurance to provide for your child's future. Also make sure a stay-at-home parent has sufficient coverage since, if something happened, the surviving parent would likely need extra money to cover the cost of child care.
FINRA Reference #FR2012-1030-0144/E 02/04/13
Check your health care coverage
It's a good idea to check your health care plan's maternity and pediatric coverage. You'll want to know if there are any out-of-pocket expenses you should budget for. And to avoid a gap in coverage, find out if you need to add your child to your policy within a certain number of days of his or her birth.
Figure out child care
If one parent plans to stop working to stay home with the baby, you may need to adjust your spending now to accommodate a future change in income. If you intend to hire a child care provider, you may want to start your research well in advance since some providers have waiting lists. Also find out if your employer offers a dependent-care flexible spending account that would allow you to set aside pretax dollars for qualified expenses.
Do you have adequate disability income insurance?
Having a family means greater financial responsibilities. What if you weren't able to work due to an illness or injury? Short- and/or long-term disability income insurance could help replace all or a portion of your earnings for a period of time. If employer-provided disability income insurance isn't adequate, consider purchasing an individual policy.
What about your will?
It will be important to update your will to name a guardian for your child and provide instructions on who should manage any inheritance. Without a will, state law and a court might make these decisions.
Look at your life insurance
The U.S. Department of Agriculture estimates it could cost the average U.S. family about $235,000 (in 2011 dollars) to raise a child through age 17. And this estimate doesn't include the cost of college. You'll want to make sure you have enough life insurance to provide for your child's future. Also make sure a stay-at-home parent has sufficient coverage since, if something happened, the surviving parent would likely need extra money to cover the cost of child care.
FINRA Reference #FR2012-1030-0144/E 02/04/13
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This is an advertisement prepared by LTM Publishing, Inc. for the use of the sender. Articles are not written or produced by the named representative. The advertisement provided is not intended as legal or tax advice and may not be relied on for purposes of avoiding federal tax penalties. All individuals, including those involved in the estate planning process, are advised to meet with their tax and legal professionals. The individual sponsoring this newsletter will work with your tax and legal advisors to help select appropriate product solutions. We do not endorse or guarantee the content or services of any website mentioned in this newsletter. We encourage you to review the privacy policy of each website you visit. Limitations, restrictions and other rules and regulations apply to many of the financial and insurance products and concepts presented in this newsletter, and they may differ according to individual situations. The publisher does not assume liability for financial decisions based on the newsletter's contents. Great care has been taken to ensure the accuracy of the newsletter copy at press time; however, markets and tax information can change suddenly. Whole or partial reproduction of Let's Talk Money® without the written permission of the publisher is forbidden. ©LTM Publishing, Inc., 2013.
We Value Your Input... Your feedback is very important to us. If you have any questions about any of the subjects covered here, or suggestions for future issues, please don't hesitate to call. It's always a pleasure to hear from you.
This is an advertisement prepared by LTM Publishing, Inc. for the use of the sender. Articles are not written or produced by the named representative. The advertisement provided is not intended as legal or tax advice and may not be relied on for purposes of avoiding federal tax penalties. All individuals, including those involved in the estate planning process, are advised to meet with their tax and legal professionals. The individual sponsoring this newsletter will work with your tax and legal advisors to help select appropriate product solutions. We do not endorse or guarantee the content or services of any website mentioned in this newsletter. We encourage you to review the privacy policy of each website you visit. Limitations, restrictions and other rules and regulations apply to many of the financial and insurance products and concepts presented in this newsletter, and they may differ according to individual situations. The publisher does not assume liability for financial decisions based on the newsletter's contents. Great care has been taken to ensure the accuracy of the newsletter copy at press time; however, markets and tax information can change suddenly. Whole or partial reproduction of Let's Talk Money® without the written permission of the publisher is forbidden. ©LTM Publishing, Inc., 2013.
We Value Your Input... Your feedback is very important to us. If you have any questions about any of the subjects covered here, or suggestions for future issues, please don't hesitate to call. It's always a pleasure to hear from you.
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