3 Financial Tips to Cover Baby-Related Expenses

Having a baby is both emotionally and financially daunting, to say the least.

According to a report by the U.S Department of Agriculture, it will cost about $245000 to raise a child that is born in 2013 until the age of 18. Of course, this doesn’t include the cost of sending them to college.

Here are 3 financial tips to help meet this challenge:

1: Prepare a budget and track spending

The first thing that you have to do is create a budget based on this development. There will be an increase in costs both in terms of housing and otherwise, thanks to an increase in family size. You’ll have to map these expenses out and adjust your budget accordingly. This is crucial since you mastering cash flow will help you deal with this new lifestyle.

 2: Set up an emergency cash reserve

Parents who are expecting a baby have to create an emergency fund for about three to six months of living expenses. This is just in case there are medical costs which insurance cannot cover. This also works as a backup just in case the mother cannot go back to work immediately.

3: Buy life insurance and complete your estate planning

Becoming a parent makes people contemplate life insurance. As a rule, ensure the insurance that you buy is 10 times your yearly income. You don’t have to buy more than you need to. Of course, some parents tend to buy more coverage to deal with future expenses. It’s important that a stay-at-home parent should have life insurance because when they pass away the surviving spouse will incur higher costs as a result.