by ENTITY

Created on: June 07, 2009   Last Updated: August 13, 2009

According to the USDA, the average cost for a middle-income family to raise a child until 18 is over $300,00.00-and that does not even include college. In addition, nearly 35 percent of those surveyed stated they were not prepared financially for the birth of their first child.

Putting aside the physical and emotional rigors of parenthood, the financial implications of having a child are staggering. In the aftermath of the 2008 economic recession, the financial future of new parents is even less certain. Fortunately, a few financial planning tips can help you create a strong financial future for you family.

Get your life insured

Young single adults often go underinsured or uninsured. However, when you become a new parent, neglected life insurance is not acceptable. Once your family depends on your income, you should be prepared for life's unexpected changes. Do it for the sake of your child, if nothing else.

Depending on family's size and ages, you will probably want coverage worth at least five to ten times your annual pay/income, more if you want to include four-year college costs plans. In addition, do not forget to insure your spouse/partner.so you will be protected as well.

Health Insurance

If you do not think, kids are expensive, start adding up the cost for prenatal exams, delivery, immunizations, and check-ups (among others) for the next 18 years. When comparing medical plans, you need to focus on issues like monthly premiums, co-payment, deductible and prescription amounts. Coverage limits and exclusions are other factors for you to consider as well.

Homeowners / Renter's Insurance

Do not allow theft, fire or other catastrophes; leaves your family without possesions or a place to live. Consider choosing a higher deductible to lower your premium and opt for replacement cost coverage that will help to replace possesions.

Disability Insurance

Nearly a third of us will suffer serious disabilities between the ages of 30 to 55. Yet many people forego long-term disability insurance, potentially leaving them without an income after a serious accident or illness. When you are disabled, your earning potential is diminished, which does not help your young family.

Start saving now

As a new parent, you have extra expenses. Your newborn should be an added incentive to save- not a reason for living paycheck to paycheck ! The earlier you start 'compounding' your saving or reinvesting the interest earned, the faster your saving will accumulate. This holds true whether you are saving for a house, pay for your future retirement plans or sends kids off to college.

Do not neglect your own future

If your employer offers 401(k) matching contributions, invest enough to take full advantage of the match.

On a final note, you must spend responsibly, if you buy things you do not need or cannot afford, you will just end up having to work longer hours to pay for them or recoup your loss for unnecessary spending. That is unrecovered time you could have spent bonding and watching your kids grow

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