Now that you’ve had your initial burst of excitement, the nerves over your financials are starting to set in. Don’t stress, grab a seat, and let’s get down to business! Preparing for a baby is more than just setting up a nursery and packing a diaper bag. It requires a lot of financial preparation including planning for medical costs, preparing to leave your job, budgeting your expenses, and managing existing debt.
Create a Budget with New Expenses in Mind
Start by talking with your partner about existing expenses and create a new budget together. If one of you is planning on staying home after the baby arrives, ask yourselves about how this is going to affect you. When creating a budget, clarify your net income. Next, identify where the money is going and track your spending. Begin by listing all fixed expenses including groceries, credit card spending, or other basic living expenses. Then, determine the amount your household needs per month to live comfortably.
Plan for the Future
Begin by opening a Registered Education Savings Plan (RESP) for your child. This type of account is designed to help you save for your child’s post-secondary education. As the beneficiary, you are able to earn tax-free interest on your RESP and any income earned from the investment is tax-deferred.
Manage Existing Debt
Consider taking out a consolidation loan. In doing this, you can pay off debt quicker at a lower interest rate by combining all of your loans into one single loan. By exploring this option, you will relieve the financial stress of being in debt and it will help you to feel more in control of your finances. This type of loan helps you deal with debt and ensure that you aren’t spending beyond your means. The best part is that you can use the money you save to open an account for future expenses, like when you’re having a baby.
Welcoming a new addition to your family can be stressful, but it doesn’t need to fluster you financially! Call us today to make an appointment or visit encompasscu.ca for more information. Our staff is committed to helping you plan to ensure your financial security during this exciting new chapter!