WSP leadership team
by Wealth Strategies Partners

Ask an Advisor w/ Caleb Boy: Am I financially prepared for a baby?

How can I financially prepare for a baby?

So, you’re adding another member to your family. You’re overjoyed! However, what does this mean for your financial house?

One of the most exciting times in life is finding out your family will be growing. This presents a new chapter in life, and with it, new decisions to make financially. Here are a few things that I always recommend to clients when they find out their family will be growing.

  • Create Sinking Fund – Open a savings account, or a bucket within an existing savings account, and fund it to ease the financial burden of Doctor’s appointments, strollers, diapers, and all the miscellaneous costs of having a baby. If you can fund an HSA to pay for qualified medical expenses, that is a great place to save, too!
  • Revisit Life Insurance Coverage – Since you are adding another dependent, making sure they are taken care of in case of a catastrophic event to yourself or your partner is paramount.
  • Review Living Will & Estate Documents – You will be adding a new beneficiary, and you need to make sure your assets are not only protected for them, but also that their guardianship is in the right hands in case of a catastrophic event.
  • Fund a 529 – 529s can be used to pay for qualified educational expenses tax-free. Investing in one early and often allows the 529 money to take advantage of compound growth! Also, new to 2024, leftover money in a 529 can now be transferred into a Roth IRA for your child (limits apply).

If you have questions about keeping your financial house in order during important life events, give us a call today at (615) 457-3481 or email me at caleb@wealthstrategiespartners.com so we can help you keep your rooms in the best shape!

529 plans come with fees and expenses, and there is a risk they may lose money or underperform. Most states offer their own 529 programs, which may provide benefits exclusively for their residents. Please consider whether the state plan offers any tax or other benefits. Tax implications can vary significantly from state to state.

Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation. You should discuss any tax or legal matters with the appropriate professional.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of [FA NAME] and not necessarily those of Raymond James.

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