As offensive as it may seem to refer to the greatest blessings of our lives as having “enormous financial consequences,” as one blogger put it, children do bring a huge dimension into the financial arena of our lives. While the exact cost can be difficult to calculate, the numbers are truly daunting — even for the most financially secure parents.
Initially, of course, the cost is relatively low. While it’s easy to get caught up in all the gadgets and baby couture, there are really only a few essentials your new child will need. But there are other, more significant purchases that every new parent should consider — purchases that will by far outlast the nursery décor and miniature clothes.
Let’s look at a few key financial and legal must-haves to check off your list before your little angel makes his or her grand debut.
Update Your Will and All Beneficiary Forms
Who will become your child’s guardian, in the situation that you and your partner are unable to do so? You’ll want to choose someone who shares the same values and that you can trust to care for and parent your child as similarly to how you would do so, were you able to complete the task.
You’ll want to double-check all of your assets, from insurance policies to retirement plans, and everything in between, to make sure all of your accounts have updated beneficiary designations that now include your child(ren).
Create a Contingent Trust
A contingent trust ensures that your hard-earned savings will be distributed as you desire, instead of allowing your child complete freedom in spending all of it on their eighteenth birthday.
Purchase or Increase Your Life Insurance Policy
When you become a parent, you’re not thinking about all the sacrifices and work you’ll be doing to care for your little one(s). But don’t underestimate them, when it comes to life insurance! You may think about what it would take to make up for both parents’ salaries, but there’s so much more! You can check out these numbers for both stay-at-home moms and moms who work outside the home, as a starting point.
Here at Nicholas Insurance, we’d be glad to explain the pros and cons of term and permanent life insurance and help you find a solution that makes sense for your family and works within your budget.
Consider Disability Insurance
If you’re still in your 20s and healthy, your future earning potential is probably something you take for granted. As your biggest financial asset, it’s something you should consider protecting through insurance. In case you get sick or injured and become unable to work, Disability Insurance Coverage can help keep your family from financial desperation. (A disability that keeps a person from being able to work for three months or longer is actually fairly common.)
If we waited until we were completely ready for the responsibility of children — financially and otherwise — most of us never would. But we can take these steps to make sure we provide for our kids the best that we possibly can.
Continue reading with Part 2.
The Nicholas Insurance Agency, led by Greg Nicholas, is a family owned business serving the York county, Pennsylvania region. In the insurance business since 1981, Greg Nicholas helps families, businesses and individuals understand the value of different insurance products and make wise decisions when selecting the best insurance products for their specific situations.
Offering exclusively Allstate insurance products, the Nicholas Agency provides auto, homeowners, rental and landlord insurance as well as life & disability, recreational vehicle, motorcycle and personal liability insurance.
For more information, visit our two York, PA locations at Westgate Plaza or Northeast Shopping Center or call us at (717) 764-2024.
Image credits: Top © Adam Borkowski/Fotolia; 2nd © WavebreakMediaMicro/Fotolia; 3rd © BENIS/Fotolia; 4th © Andersen Ross/Blend Images LLC/Fotolia.