1. Build Your Emergency Fund
Do you have a reserve cushion of three to six months of living expenses set aside? If not, get started on building one today by automating your savings and getting that first $1,000 set aside at a minimum. If you're a single-income household, it's best to be conservative and plan for six months of expenses in reserves.
2. Tackle Debt
Parenthood will likely be hard enough without the added stress of credit card and loan payments. If possible, pay down debt prior to the baby's arrival. Set a biweekly or monthly pay-down goal and refrain from adding to balances. By paying off early, you'll save money in interest and be able to shore up your savings faster.
3. Create or Update Your Budget
If you don't have a spending plan, create one using an online program and include changes in:
- Groceries. How are items like baby food, diapers, formula and more going to change your spending? Where are the best prices?
- Transportation. Will you need to buy a child-friendly car? Does your current one have room for a car seat? What are your options for updated transportation?
- Child care. In some cities, paying for day care can run parallel to the amount of your mortgage. Explore and prepare for costs around nannies, day-care groups or individual care. If you're thinking of switching to one income, begin living off one income today and start stocking away the rest.
- Medical costs. Contact your benefits department and insurance provider to get clear on premiums, copays and coverage for your new addition. How much will your premiums increase? Are vaccines covered? How often can you expect to go in for check-ups? Now is a good time to take advantage of your employer's Health Savings Account, if offer ed.
We don't like to think about the bad things that could happen in life, but making sure you have a plan in place is one of the best gifts you can give your family.
- Wills. A will ensures your wishes are documented for your assets and appoints an executor to handle issues associated with your estate.
- Guardianship. When appointing a guardian, consider who your children would feel the most comfortable with and what their values are. In addition, look to whom you think would most responsibly and effectively control any funds left to them.
- Life insurance. Life insurance isn't about you. It's about your family and ensuring they're protected and able to replace any income lost if something happened to you or your partner. Consider your debt levels, income, assets and existing policies to ensure your family has income to sustain its lifestyle.
- Disability insurance. Should you be disabled for a short- or long-term period, this coverage will ensure you're paid a percentage of your income.
Having a baby can be exciting and stressful. Whether you're going it alone or as a part of a team, check in on your expenses monthly and set SMART goals to keep accountable and on track with spending.
Mary Beth Storjohann is a certified financial planner and the founder and CEO of Workable Wealth.