When you are expecting a baby, the last thing you want to focus on is your own mortality. There are so many other matters that need attending to – creating a new room in the home, communicating your needs to friends and family, learning a new role in life, taking care of your own and your baby’s health.
Nevertheless, there are steps you can take during this hectic period that can ensure financial peace of mind going forward.
1. Do the numbers
Whatever your budget was before, it will change radically now. Even if you weren’t in the 1 percent, you still had enough funds to indulge yourself. All that changes now. Childcare was not an issue in your life up to now. You will have to pay for things like diapers, clothes, bedding, medicine, toys and so much more. You need to identify these new costs, to minimize surprises later.
2. Have a plan
Address key financial issues that are relevant to your new family. What are your priorities — paying down debt or taking on new debt to buy a home? Do you both intend to return to work, or will one of you assume the job of primary breadwinner? In our volatile world, it is never a bad idea to anticipate a recession, and to anticipate how you would cope with that.
3. Contemplate the worst
It Is highly unlikely you will die in the next few months. You shouldn’t be unduly anxious on this account. Still, stuff happens. We tell clients at every life stage that it is wise to have a written will, and to have some kind of life insurance. Laugh at this precaution, but it is only sensible to protect your family against a catastrophe. If you did die, you would not want your partner and your child to have to deal with paperwork on top of their loss.
The good news is that writing a will and buying term life insurance is easier and more affordable now than it ever will be again.
4. Name a backup
It is wise to think about who will look after your child in the (again, unlikely) event of your and your partner’s death or incapacitation. Naming a guardian is not written in stone. People change their choices all the time.
Another simple but useful document is the power of attorney, naming a trusted person to make decisions for you. And a living will, spelling out your preferences for medical treatment if you are ever unable to decide for yourself.
These are just a few thoughts to consider during this amazing time. It probably seems very daunting during this wonderful life moment to consider negative events. But one thing we have learned is that negative events are less scary when they are acknowledged and planned for.