{"id":4833,"date":"2023-02-24T15:38:00","date_gmt":"2023-02-24T23:38:00","guid":{"rendered":"https:\/\/www.soundcu.com\/?p=4833"},"modified":"2024-04-09T15:00:19","modified_gmt":"2024-04-09T22:00:19","slug":"parenthood-how-children-change-your-financial-picture","status":"publish","type":"post","link":"https:\/\/www.soundcu.com\/blog\/parenthood-how-children-change-your-financial-picture\/","title":{"rendered":"Parenthood: How Children Change Your Financial Picture"},"content":{"rendered":"
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Parenthood: How Children Change Your Financial Picture<\/h2>\n

Becoming a new parent means taking on many new responsibilities. Not only are you now in charge of another human\u2019s financial wellbeing, you also have more expenses to plan and budget for. Also, how you spend and save money, and your overall attitude about your finances will likely shape how your child approaches finances in the future.<\/p>\n

While all this can seem a little overwhelming at first, with a strategic approach, you and your family can prepare for the exciting days ahead. Here\u2019s a look at some of the best ways to financially approach a new bundle of joy.<\/p>\n

Look at the Big Picture<\/strong><\/h2>\n

Kids can give us a new perspective and really ground us in what\u2019s most important,\u201d says Ashley Feinstein Gerstley, mother, CEO of the Fiscal Femme and author of Financial Adulting<\/em>. \u201cThis can really help align our finances <\/a>with our values.\u201d<\/p>\n

First, keep in mind that your costs in the first few years of your new baby\u2019s life will vary greatly depending on where you live, Gerstley says. Childcare for one infant, for example, can be many thousands of dollars per month in New York City, or $800 or so in a city with a lower cost of living. There are other fixed costs you\u2019ll need to budget for, including diapers, formula, copays for doctor visits, clothing, and other items including baby toys, a stroller, a changing table, a car seat, and all other baby essentials.<\/p>\n

Once you take a look at all your expected costs in the first year, you may want to open a separate account at your credit union so you can start making contributions to your \u201cbaby fund\u201d early on. (And if friends and family don\u2019t know what to get you, you can always point them in the direction of making a contribution to this account!) And note: Even if you\u2019re only able to save a small amount, it\u2019s better than nothing, and making a list of all your expected expenses will help you incorporate these new costs into your budget before your bundle of joy arrives.<\/p>\n

Once you\u2019ve made it past your baby\u2019s first year, it can be a good time to start preparing for larger irregular expenses. With children come new reasons to spend such as birthdays, holidays, school tuition, camps, sitters, extra curricular activities and added travel costs. You may find it easier to open up several savings accounts at your credit union and start storing money away each month for each individual goal so you\u2019re not suddenly caught off guard by all the extras. Behavioral finance experts teach us that having a specially labeled account for each goal will make it easier for you to succeed when saving for them.<\/p>\n

Revisit Your Emergency Plans & Protection<\/strong><\/h2>\n

Next, check in on your emergency fund. Losing a job or experiencing another financial crisis has new significance when you\u2019re a parent. The amount you\u2019ll need to have saved to feel comfortable may be significantly more with a baby on board. For example, if you already have three months worth of living expenses saved in a separate account, start adding to your stash so you can get closer to four or five months of expenses. (Think basic necessities such as rent, food and utilities.)<\/p>\n

You\u2019ll also want to get quotes for term life insurance and disability coverage, in case you don\u2019t have them already. If anyone in your household depends on your income, you need both. And if something happens to you, you\u2019ll want to make sure your family is covered.<\/p>\n

Speaking of protection, now is also a great time to update or create your will. All too often, we think of estate planning as something only for the wealthy \u2014 but it\u2019s not. Every parent should have a will so they can share their plans for who will look after their child should the worst happen.<\/p>\n

Teach Children the Value of Money<\/strong><\/h2>\n

Finally, as your kids get older, don\u2019t hesitate to talk to them about money. \u201cIt\u2019s important for kids to learn the value of money in terms of how hard we work for it,\u201d says Kerry Gaertner, mom and Principal of Ver Sacrum Fine Art Consulting. \u201cBut also how unfair it is. Hard work doesn\u2019t always equate to being richer. That’s a myth. It\u2019s been important for my child to see financial diversity in school, and see his parents work for our money and be grateful for what it affords us.\u201d<\/p>\n

“There\u2019s nothing like earning money to make children appreciate how much work it takes to afford the things and experiences they want,” Gaertner says. \u201cIt also gives them a sense of agency and self-worth. I tell all my kids that financial independence is key and that they should never plan to depend on anyone else to take care of them.\u201d<\/p>\n

Money lessons with your children can start small, even when they\u2019re young. For example, a quick trip to the grocery store can turn into a conversation about budgeting. You can point out how the name brand cereal costs $2 more than the store brand, and go into a broader discussion of what it means to be a smart shopper. Likewise, when you talk about going to work, you can engage your child in conversation about being paid for the job that you do, and how the money you earn is how your family affords to buy the things you want and need. In other words, starting with the most simplistic concepts is great \u2014 they can be eye-opening to a child who is brand new to understanding how money works.<\/p>\n<\/div>\t\t\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\n\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Money lessons with your children can start small, even when they\u2019re young. Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":13,"featured_media":10819,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","_searchwp_excluded":"","footnotes":""},"categories":[50],"tags":[],"class_list":["post-4833","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-life-finances"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/posts\/4833","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/users\/13"}],"replies":[{"embeddable":true,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/comments?post=4833"}],"version-history":[{"count":1,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/posts\/4833\/revisions"}],"predecessor-version":[{"id":10820,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/posts\/4833\/revisions\/10820"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/media\/10819"}],"wp:attachment":[{"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/media?parent=4833"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/categories?post=4833"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/tags?post=4833"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}