When you were 18 years old, everyone around you was planning their big fat 18th birthday party. Then came the round of 21sts. “What should I wear?” “Where should I host it?” “BYO or drinks or am I shouting everything?” I am sure all these questions were a list you went through when planning for that chapter of your life.
Before you knew it, your friends were getting married and then - it was your turn. Wedding dress – check, Groom’s suit-check, venue-check, wedding planner-check, photographer-check, bridal party – check and the list continues.
Let’s fast forward to right now. You have just learnt that you and your other half are going to be welcoming a little bundle of joy into your household - exciting times are ahead! But wait, am I ready for this? What is the ‘list’ I need to ‘check’ to ensure my family can handle this change??
Growing your family and planning for that next chapter with children is part of the progression of life. This can be a daunting time, financially, for a lot of couples. Here are some things to consider when planning for that amazing next chapter.
Remember that rainy day fund? Yeah... it’s important
You don’t need to be rich when you’re preparing for a baby, but you should have that rainy-day fund handy. If both parents are going to take time off or perhaps you are a single parent, having an emergency pool of money will ease the stress and will make the process seamless when little bubba arrives.
Are you stable in your career?
Can you honestly say that you are doing alright in your current job? You have a few years of experience under your belt and you have a decent level of job security. Are you working part-time, full-time or are you a casual? Will your current employer offer flexibility during the crucial beginning stages of parenthood (e.g. working from home and/or dropping down to part-time for a few months)? These are all important aspects to consider before you take the plunge into parenthood.
Having children is more than just diapers
Yes, diapers are important, don’t get me wrong, but there is much more to consider as your child grows up. Consider the long-term expenses you will have as the years pass, like schooling, extracurricular activities and medical requirements. A great idea is to make a list from most to least important aspects for both long and short term. Try saving where possible, remember it’s all about contingency planning when mastering money management.
Are mum or dad going to take significant amount of parental leave?
Have you and your partner discussed what’s going to happen in terms of work? Is the Mrs. going to take a year off to focus on the baby, or maybe hubby wants to be a stay at home dad for a while? This will impact your collaborative household income; what changes are you going to make in order to adjust to this new situation? Will you need to invest in extra help?
Are you a single parent?
If you are a single parent, you will have to consider how your lifestyle will change now that you are earning for 2 instead of 1. Will you need to cut corners or maybe take a shorter amount of parental leave? Is the child’s other parent present and in a capacity to co-parent with you?
Okay now pause and enjoy the excitement of what comes next. Yes, there are a lot of questions that come with bringing a baby into the world and plenty of stress but just breathe, it is going to be okay!
With our pre-baby and we’re-ready-for-the-next-baby clients, it’s been our job to crunch the numbers and to assure them what the budget is going to look like and help them ensure that #familylife is going to be mighty fine. We provide our clients with a six-month action plan to save and achieve what they need for their family’s future. Often, an efficient implementation strategy is exactly what you need for a sense of relief and comfort, knowing that your family’s growth is going to be smooth.
A financial adviser will walk you through this enormous, yet exciting, new step and will help you navigate through the unique set of challenges that come with the arrival of your little bundle of joy. Bringing you comfort and removing your stress is so incredibly rewarding to a financial adviser in the family advice space.
Don’t sweat it; we will make sure you are well-equipped for the likely dollar impacts bubbas bring and prepare you for the new financial responsibilities of parenthood.
Kora Drage is an Authorised Representative of Financial Wisdom Limited ABN 70 006 646 108, AFSL 231138. Her advice is general in nature. It does not take into account your financial circumstances and objectives. You should consider talking to a financial adviser and read the relevant Product Disclosure Statement (PDS) before making a financial decision. Any views and opinions provided in this article may not reflect the views and opinions of Financial Wisdom Limited.