Ashley Temer is a Financial Representative with Northwestern Mutual who helps professionals, families, and business owners plan for financial security. She’s here for your “Money Minute.”
It is commonly known that having kids will have an impact on your finances. The question is, how much and what can you do to plan for it?
The first step is to build a budget and stick to it. Remember the 60/20/20 rule. If you are planning to take maternity leave, your income will likely be cut down during this time because short-term disability is designed to replace only a portion of your salary. Remember, you’ll have added expenses during this time such as a nursery and purchasing a car seat. The money you spend on diapers, formula, and daycare over the first few years will gradually be used for funding healthcare, food, and extracurricular activities. As your child becomes a teenager, expenses will shift to electronics and transportation.
You are not alone if you’re thinking “how am I going to make it work when I have other financial goals like college savings and retirement?” You can alleviate a lot of anxiety with two things; a solid financial plan and the discipline to stick with it.