How Your Finances Should “Change” After You Become Parents

Upgrading your finances makes for one of your crucial responsibilities as new parents. Has the baby arrived? Or is it about to arrive soon? Are you done setting up the nursery? Have you kept aside the delivery charges? What should your financial checklist look like after your baby has arrived?

Documented below are a few ways in which you should upgrade your finance after your baby is born. Read on in order to unravel.

Do you know about the importance of Social Insurance Number?

Make sure you are focusing on the creation of a social insurance number for the baby. If you are living in Canada or want your baby to work there in the near future then you ideally- at first- establish a registered education savings plan in his or her name. Your child will require a social insurance number. Most of the provinces of the country offer a Newborn Registration Service which enables new parents to apply for the social insurance number or SIN. This is done while issuing the child’s birth registration. In Ontario and British Columbia, you can also apply for the birth certificate at the same time.

Why Reviewing the Insurance Policy is Important

The arrival of the baby necessitates a thorough review of your insurance. If you are yet to secure a life insurance policy then it is the time to get one. If you already have a life insurance policy (which you ideally should have) you should check whether the terms mentioned in the policy are sufficient enough to cover the needs of the new addition to the family or not.

Should you Undermine your Financial Goals?

How do you strike the right balance between your own financial goals and your child’s needs? Everybody will tell you that your baby’s needs should definitely be prioritized but that doesn’t really mean that you should dismiss your own needs totally. So, how is it that you should aim for that perfect balance? It is very important to include childcare, education and food costs in your budget.

However, doing this definitely doesn’t mean that you will focus solely on these needs and completely forget about your own financial goals. Do not hesitate to save money for property, car etc. Additionally, be prudent enough to set aside money for important emergencies like job loss, pay cut and drain of wealth in the form of medical bills as well. So the motto of your financial planning after a kid is born should be “your baby’s need come first but that shouldn’t mean that you should undermine your needs”.

Power of Attorney: A Must!

Do establish powers of attorney. This may be the last thing on your mind but you should be prudent enough to decide who your child’s legal (and financial) guardian will be in the event of your absence. Put in writing the name of the person who should be responsible. Pick a close friend or relative who is willing to take those decisions for you in your absence. Set up a health care power of attorney.