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Image via Pexels Financial Planning for Parents 101 Once you've decided it's time to become a parent, financial planning is a smart idea. You can't control what life leads you, but you can control your resources. Use these helpful tips to get a good financial shape when you start parenting. Evaluate your resources Before you can plan ahead, you need to know where you are. Check your resources, including cash, credits, pension funds, properties, shares, bonds, patents and copyrights. If all of this sounds overwhelming, consider hiring a financial planner who can help you create a personal financial statement that you can use as a basis for your future decisions. Start a budget The word "budget" certainly does not arouse ideas of fun moments, but if you want to start saving for the future of your child, it is an essential life. Set aside how much money you have to spend on the fixed costs of life essentials like rent (or your mortgage), insurance and taxes. Many of us have little or no control over how much we have to pay for these things. From there, you can find ways to cut costs for the rest of the things you spend money on. Take the money you save and set it aside in a savings account that you can access for your child if you need it. Cut costs When you become a parent, the days of shaking off minute expenses like ATM commissions are behind you. Reducing costs in all areas of your life can add up in the long run. And any of those pennies you pinch can be stored for your child's future. Think about it. Let's say you somehow cut your daily expenses by $ 5 – let's say brown bagging your lunch instead of buying something from a restaurant. If you started that action on the day your child was born, putting aside the dollars you don't spend in a savings account, you'll get a large chunk of their college tuition paid. Only $ 5 a day for 365 days, over 17 years amounted to $ 31,025, and that's before any interest you've earned. Other ways to cut costs and save money for your child's future: Implement a 30-day rule in which you wait before making a purchase. Start shopping online and pick them up to stay on budget. Use a credit card consolidation loan to simplify payments while improving your credit score. Switch to water when you order at the restaurant and bring a bottle of water with you to avoid impulsive purchases when you are thirsty at home. Make low-power updates throughout the home to reduce electricity and gas bills. Establish Legal and Financial Protection Things like a will and a good life insurance plan will protect your child in case the unthinkable occurs and you can't be there to do it alone. Make an appointment with a lawyer and update your will with any major life change such as marriage, divorce or a new child. When it comes to buying life insurance, there are three basic varieties: term, universal and whole life. While term life insurance is cheaper, it eventually expires and no compensation is paid after that period. The whole life insurance lasts – you guessed it – the whole life of the insured. Universal combines aspects of both full and term life insurance. When choosing your life insurance plan, make sure you understand the different cash values ​​and premiums available. With some plans, you can sell your retirement insurance as a means of freeing money, so it basically acts as a savings plan. If you are looking for life insurance and want to get an idea of ​​the costs, try using this rate calculator to see what you could potentially pay for. *** The costs of raising a child shouldn't stop you from having one, but a little financial planning is a smart idea. Evaluate your resources and establish a budget that will allow you to save dollars for your child's future and emergency costs. The money you save by doing things like bringing your lunch or turning off the lights add up. Beyond a job budget, protect your child with a will and life insurance that ensure they are financially set in a worst case scenario. Sara |