Brandon’s family is getting ready to welcome a baby boy! In this episode of Coffee with Waymark, he shares practical tips for taking the first “baby step” toward managing the financial impact of growing your family. From budgeting for diapers and daycare to reviewing emergency funds, paid leave and life insurance. He even throws in some tips on estate and education planning for your little one!
Key Points Discussed:
Adjusting the family budget
Emergency fund review
Paid family and medical leave
Insurance and beneficiaries
Estate planning and education savings
Transcript:
Hey everyone. As some of you may already know, my wife and I are expecting our third child in February. We are both very excited, and thought I would take this as an opportunity to jump on here and share with you some of the things that we are doing financially to prepare for our third child.
First and foremost, we'll be looking at updating our budget, taking a look at it, and trying to see if there's anything that we should be dropping, and making room for those baby expenses: diapers, clothes and potentially daycare costs.
So it's not about just looking at your budget, but also looking at future expenses and trying to forecast as best as possible. With that said, you can't always plan for all expenses. So we'll next look at building our emergency fund and make sure it's sufficient enough to cover us. Typically, rule of thumb is to keep about three to six months of fixed expenses in an emergency fund in case of any emergency that you need.
One thing is potentially unpaid leave, which brings us up to my next thing that we'll be looking at, which of course is leave from work. How many days does work cover, paid versus unpaid, and if we want to take longer that's unpaid, does that emergency fund cover us? So we'll definitely have to take a look at all that.
One other program that we'll be looking at is the newer paid family and medical leave program in the state of Massachusetts. That I currently pay into, and my understanding right now is that the benefit could be up to 80 percent of my weekly rate wage for up to 12 weeks. After that, we'll then have to turn to our investments, and specifically our beneficiaries.
This is probably more so once the baby arrives, and taking a look at what things need to be updated specifically with life insurance policies and the investments that we have to include the baby as a beneficiary. Speaking of life insurance, one thing that we'll want to look at is our coverage.
Do we have sufficient coverage now to cover a third child in case something unexpected would happen to myself or my wife? With that said, things that people don't typically think about is life insurance for your child. So, I'll be looking into my employer benefits to see if they offer such coverage and if not, potentially look elsewhere to apply.
Next on the list would be looking at my estate plan with my attorney. It may or may not be necessary to update it, but it's good just to check in with the attorney to make sure that it still is up to date and is up to our wishes, and just see if it's anything that we need to be concerned of and update.
Last, but not least is education funding. So we will be looking into setting up a 529 for our third child, just like we have for the other two kids, as it is also a great spot for gifts that we receive from any parents or grandparents that are looking to help out where they can. So we'll definitely be looking into that and setting up one for our third child just like the other two.
Well, here's some of my tips. Hopefully this was helpful. I want to thank you guys for watching and as always, be well and do good. Thanks so much.
Brandon Cardarelli, CFP® is Associate Advisor for Waymark Wealth Management and has been on the Waymark team for his entire professional career of over 15 years. He joined Waymark shortly after graduating from Bryant University, where he earned his Bachelor of Science degree in accounting.
Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC.
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The opinions voiced in this video are for general information only and are not intended to provide specific advice or recommendations for any individual.
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