Raising your little bundle of joy may cost more than you think. I've listed 5 things for you to think about.
You probably don't need estimates from a government agency to determine how expensive raising children can be. Even when you factor out the cost of a driver's license, first car, or a year abroad, young children can cost a lot of money for working parents.
Monthly costs for childcare and later summer camps are often as high or higher than mortgage payments. Therefore, good planning is important to find out how much more you spend (and save!) must, if there is a baby on board.
You need a new budget
If there was ever a time to review or create from scratch your monthly spending plan, it is when you welcome a newborn baby. Adding a child to your household can mean several hundred extra expenses per month. You need to figure out where the money is going to come from and where you can probably start cutting other expenses. To create a new budget, go through your old budget line by line and ask yourself where you could spend least. Eating out? Clothing? Subscriptions?
Now take your new budget and add in estimated expenses related to the baby.
Grow your emergency fund
Something can always happen. Therefore, everyone should have an emergency fund anyway. When a new baby arrives, we must expect more unexpected events all the more. This means you should strive to set aside three to six months' worth of living expenses, or significantly more, in a per diem account. If you've just recently depleted your savings, don't worry about it. Start replenishing the Notfollfolds now by transferring a certain amount to the separate Kono every month so you won't be tempted to spend it on diapers, baby food or going out to eat.
Consider more life and disability coverage
The more people who depend on your income, the more protection you need in case something happens to you or you can't work in the future. Usually begin with term life insurance, as this was the only way most new parents could acquire as much coverage as they needed. Since many people don't have children until later in life, they may still need coverage after the 20 or 30 year term is over. One option is to convert all or part of the contract into a permanent insurance policy. Another option is to replace a 20 or 30 year contract halfway through the first one with another one.
Make a will
No one likes to think about death, but if you have children, I think you should have made arrangements.
A will is the only document parents can use to name a guardian for their children. It means you get to choose who takes care of the kids if something happens to you. If you don't have a will, courts decide what happens to your children.
Focus on your health insurance
Switching from single to family health insurance can increase your expenses by several hundred euros per month. If you're married and your spouse is covered under a different plan, you should thoroughly compare benefits to find out which option offers the best protection at the lowest cost.