Gearing Up to Be a First-Time Dad? 3 Money Moves to Make
Becoming a dad is exciting. And you may be counting down the days until your little bundle of joy makes their entrance into the world.
But having a baby for the first time can be intimidating, especially at a time when inflation is still surging and living costs are up across the board. So if you're in that boat, try to check these important items off your list before your newborn arrives.
1. Build an emergency fund
It's important to have money in your savings account for unplanned expenses no matter what your family situation looks like. But it's even more important to have a fully loaded emergency fund when you're bringing a baby into the mix.
You never know what surprise bills you might end up facing in the course of your child's birth. And you may end up with extra expenses early on due to needing to purchase supplies. Plus, your childcare costs might end up coming in higher than expected.
That's why it's so important to build yourself a safety net. Aim for enough money in savings to cover three full months of essential living costs at a minimum. That way, you'll also have money to tap in case you end up needing to take time off from work unexpectedly upon your baby's arrival.
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2. Buy life insurance
Now that you're about to be responsible for another human being, it's important to put a life insurance policy in place. And the good news is that a decent policy won't necessarily cost you a fortune, especially if you're in reasonably good health.
The average cost for a 20-year, $1 million term life insurance policy is $55.50 a month for a 32-year-old male applicant who's a non-smoker. Your costs might be different depending on your health, but that should give you an idea of what you might spend.
Take the time to shop around for life insurance quotes before your newborn arrives. Once your baby makes their appearance, you might be too busy and sleep-deprived to focus on this important decision.
3. Figure out what parental leave you're entitled to
You may have the goal of bonding with your newborn once they enter the world. Now's the time to figure out what your company's parental leave policy looks like.
You may be entitled to some of your paid time off following your child's birth. Or, you may not be. Generally, you can use vacation time for parental leave when there's not a separate policy, so you may want to work on banking those days in the coming months.
Even if you're not entitled to paid parental leave, you may be entitled to unpaid leave if that's something you can afford. Figure out your options ahead of time so you can plan to be there for your child accordingly.
There's nothing like becoming a father for the first time. And if you make these moves before your baby's arrival, you can embrace fatherhood with more confidence, at least financially speaking.
This article was written by Maurie Backman from The Motley Fool and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com.
