Congratulations are in order!
There is so much to look forward to as a new parent, but there are also some important financial decisions that you need to keep in mind.
So, you’ve had a baby, now what?
- Get your child’s birth certificate, Social Insurance Number (SIN), and Health Card, if applicable.
- Update your benefits plan at work to include your child, if applicable.
- If you already have life insurance, update the beneficiary to include your new child. And if you don’t, make sure to reach out to your advisor to get a sense of what you may need to support your new family.
There is a lot to plan for when you have a little one – wonderful moments like birthdays, vacations, first words, and first steps. Don’t forget that supporting a child costs money. There is no doubt that it is expensive to raise children; managing the planned and even the unforeseen events can be difficult. We suggest taking these five steps to make sure your growing family is financially prepared:
- Review your financial plan – If you don’t have a plan, it’s even more important to create one. Start by understanding your income and expenses to help you to take a fresh look at your spending priorities. Discuss income with your partner and understand the impacts of taking paid or unpaid parental leave, as well as single-income living.
- Start saving – It could be as easy as setting up a savings plan, separate banking account, or investment vehicle to help you put aside money. Post-secondary education can cost well over $100,000. Consider opening a Registered Education Savings Plan (RESP). The federal government adds 20% for annual contributions up to $2,500. That’s a free $200 for every $1,000 you save.
- Plan for the unexpected – With a baby added to your growing family, it’s time to draw up a will and review your estate plan. It’s unpleasant to dwell on, but you want to minimize the impact of an unexpected death and make sure your family is protected.
- Protect your family – If you have a group plan at work, check your health, disability and life insurance coverage — you want to be sure you have enough coverage for your growing family. Take advantage of the full benefits, including any new parent information or services.
The best way to provide for your child’s long-term financial security is to have your own finances in order. The healthier you are financially, the better your child’s financial prospects.
Congratulations — you’re a parent!