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I see so many posts about budgeting for a baby or how to plan financially for adding children to your family, but it always seems that people rarely think beyond the initial expenses of having a kid. With all of the changes that we've had in life this past year (a new house, a new baby on the way, etc.), the future of our family's financial situation is something that Joe and I think about often. Money has always been a heavily discussed topic in our marriage, but with so many new responsibilities, it seems to get brought up almost every time Joe and I talk. As we think about the future of this little family of ours, everything that we want to do and what we need to be prepared for, there are a few things that we've felt are important in setting ourselves up for success.
Our current financial goal has been to build up six to nine months of living expenses in addition to the $1000 that we already had in our "emergency savings" account. We added up our mortgage payment, monthly bills, and the necessary expenses such as groceries, gas, car maintenance, etc. and figured out how much we would need to have set aside to survive if one or both of us were out of work. Hopefully we wouldn't lose every source of income at the same time, but it never hurts to be over prepared.
Home Maintenance Schedule
When we started on our home renovations last year, we purposely put money into things that would make our home safer. We upgraded our water pipes so that they'd be less likely to burst and we added smoke detectors to the basement rooms and each bedroom upstairs. We just need to add a carbon monoxide detector and we will be set! Now that we are homeowners, we realize that we need to maintain our home in order to keep it and our family safe. It may not be completely money related, but investing the time and money into keeping our house in the best shape and updating things each year will save us from unnecessary expenses or home emergencies in the future and make our house safe to live in as well.
You may think we're weird, but we plan on purchasing term life insurance for both of us as our anniversary gift to each other this year. Super romantic, I know, but it's something that we both feel is extremely important. As soon as we bought a house, we knew that a policy in addition to the ones provided by our employers was something that we should probably get. Now, with a baby on the way, there is no doubt that life insurance is one of the greatest gifts that we could give each other. Having that piece of mind that no matter what, those that we love would be cared for and not left with any sort of financial burden is worth it!
An Envelope for the Puppy
Yes, we've even included the dog in our financial planning. Howie has his own envelope that gets cash deposited in it once a month. We use that money mostly for grooming expenses, but a little bit stays in there and is saved for any medical expenses that he might have in the future or other emergencies. He's part of our family and like I mentioned the other day, we want to keep him around for as long as possible, so investing in his health and future is a must.
Our Children's Future
We don't even have our baby here yet, but we've already started thinking about how we want to handle money with our kids. Joe talks about how he wants to save for college if they choose to go, we have a plan for their first car and auto insurance and we know how we plan to handle giving them an "allowance". Being financially prepared and stable ourselves is important, but it's just as important, if not more, for us to be prepared to teach our children how to be responsible with money as well. Thinking far into the future, the things that we're doing now can have an impact our grandchildren, great-grandchildren, etc. because we will be teaching our kids by example and those lessons will hopefully continue to be passed down for generations to come.
While I've been researching the things that we need to be prepared for when it comes to the cost of raising a child, this list of things to budget for for was extremely helpful! It gave me ideas that we hadn't even thought about before, and we were sure that we'd thought of them all. I found a lot more great tips for planning for your future where money is involved on this this learning center on the Protective Life website.
How are you preparing financially for your family's secure future?