When you become a parent, there are suddenly a million worries at all times. Things you never even thought to stress over become imperative, and life gets overwhelming pretty quickly. When you have a little life depending on you for every single need, it can be hard to think about the future because you’re just trying to get through the day. Potty training and play dates, teething and child care are a lot to think about, but preparing a little bit now for a time down the road will help give you peace of mind.
The easiest way to begin is simply by looking at your current finances and taking into consideration any contingencies in the future. It might help to ask an older friend or family member for advice on what to be prepared for as far as retirement goes. Then, create a realistic budget with your spouse or partner and figure out where savings can be made.
Here are a few helpful tips on how to start.
Get your estate in order
Depending on what state you live in, there could be a lengthy legal process regarding your estate after you pass on. Even if you’re young and healthy, it’s a good idea to consult a lawyer and get your affairs in order now so that your family won’t have to go through a long, drawn-out process when it comes time to handle your assets. Draw up a living will and be as thorough as possible; this will ensure there are no questions about the care of your home, your children, or your estate.
Create a budget and stick to it
Creating a budget is the best way to see where your money goes and how much you’re bringing in versus how much goes out. Sit down with your partner and work out your weekly finances–weekly, not monthly–to see what cuts could be made. Do you have cable television but don’t use it much? Consider scrapping it for a cheaper subscription to a streaming service. Do you have a long commute to work? Ask around to see if there are coworkers who would like to carpool. Look around your home to see if there are ways you can save on your heating and A/C bills; for instance, if there are cracks around windows or doors, seal them up to prevent air from escaping. Change your ceiling fans to turn in the opposite direction so they’ll push hot air down from the ceiling and lower your heating bill each month.
Start a college fund
Saving for higher education for your children doesn’t have to end with you; enlist the help of grandparents and, if you know they’re planning on buying toys for a birthday or holiday, ask them to write a check in your child’s name instead. A savings account in your child’s name will help teach them responsibility with money, while a 529 college savings account will ensure that the funds are used for school only and give you some tax benefits at the same time.
Skip the overdraft protection
Your bank likely offers overdraft protection on your checking account, and while it’s an attractive feature, it might hurt you in the long run. Being able to spend money you don’t have will only lead to trouble, so skip the overdraft protection and see if your bank offers a mobile app instead. That way, you can stay up-to-date with your accounts in real time and make sure you always have enough to cover your expenses.
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