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5 Ways Future Parents should Financially Prepare by Sasha Jacob

Your wedding preparation was likely the most time-consuming and costly moments of your life. Get ready for the record to be broken when you’re expecting a child. Worrying over what to serve your wedding guests is problematic, but worrying about whether you’re financially prepared for your baby is something else.

This exciting-but-stressful time for you and your spouse can be overwhelming but you need to get some things done before your little one is born. Sasha Jacob as an acclaimed financial advisor and CEO of Jacob Capital Management Inc., says the process of financially preparing gets easier when you think of what’s waiting up ahead.

Following the steps provided below will help you get through the rough first months of parenthood and protect your financial security from the worst possible events.

Sasha Jacob gives tips to financially prepare as future parents :

  1. Estimate how many bills you’ll be paying during the first year.

According to TD Canada Trust, the cost of raising a baby for the first year is roughly C$8,000. It’s also recommended to consider the additional expense brought about by a reduced income due to parental leave. You can use the BabyCenter’s calculator at tinyurl.com/costofbaby if you want to see an estimate of your bills during the first year.

After seeing the result, hopefully, it will impact the way you look at your finances. It can prod you to be more mindful of where your money is going.

  1. Create a financial plan.

If you don’t trust your skills on this task, you can always work with a trusted financial advisor. Here’ you’ll need to be completely honest about your current financial circumstances as individuals and as a married couple.

Your planner will put the numbers into a long-range financial plan. Here, you’ll need to weigh out some important issues. This will also help you decide on how to prioritize saving money versus paying off debt. It might get a little complicated but your advisor knows how to figure out everything.

  1. Decide who works or stays at home.

This is an urgent dilemma that needs to be settled. For new parents, they need to decide whether one or both of them should cut back on work, or quit working to stay home with their baby.

Sasha Jacob says you can run two different scenarios so you can determine the current and future costs and benefits of continuing to work against staying at home. Consider some factors before coming to the final decisions, such as who earns more or has better work benefits.

  1. Determine the cost of childcare.

If you and your spouse decided to continue working, make sure you can have the daycare costs covered. Daycare can get very expensive especially if you live in Toronto. Parents pay a median fee of C$1,758 a month or C $21,096 a year.

An in-home care is also a good option if you don’t have enough time to drop-off or fetch your child. Although the price could double, it might be worth it for some parents who can afford it.

  1. Settle your life insurance.

If you and your spouse still don’t have a life insurance, this is the perfect time to talk about it. Your coverage costs should vary depending on your situation. However, you shouldn’t be surprised if you’ll need between C$ 500,000 to C$ 1,000,000 to cover the cost of raising the child, paying for college, retiring debts, and potential lost wages.

A stay-at-home parent also needs to be insured come an event of a tragedy. The benefits will definitely help the working parent to either quit to care for the children or hire an outside help.

Planning for your and your kid’s finances might require some tie so it’s highly advisable to do so before or at the early stage of pregnancy. Sasha Jacob on LinkedIn says the burden can be too much for you during the later stage.

Finally, don’t be hesitant to ask your advisor if there’s anything bothering you. It’s always better to get into the details of your finances before you or your partner gives birth.



This post first appeared on Sasha Jacob – Jacob Capital Management Inc, please read the originial post: here

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5 Ways Future Parents should Financially Prepare by Sasha Jacob

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