Congrats on your new journey as a parent! It’s a wonderful & life changing experience, and it’s wise to consider a few financial aspects early on.
Get your Will sorted
As a parent, having a Will is absolutely crucial. In the unfortunate event both parents were to pass away, your Will outlines who you want to look after your children (this is known as guardianship). It also outlines how you want your estate to be administered (e.g. who you want to leave all your assets to).
Setting up a savings or investment account for the kids
Starting an account for your kids when they’re young can be lifechanging by the time they reach adulthood, thanks to long-term investment returns and the beauty of compound interest. This could be in the form of a simple savings account (likely to have lower interest rate returns), or an investment fund (varying risk levels and investment returns).
Let’s have a look at an example:
If you put away $20 a week into an investment fund from when your child is born until they reach 18 (assuming a 10% average return over that timeframe), the balance could be around $49,712. (Composed of $18,720 savings and $30,992 interest) – Use this Sorted calculator to work out your own savings goals.
Insurance
If something happens to you or your partner, would you be able to cope raising a child on a your own / a single income? Having Insurance cover (e.g. Life / Trauma / Income protection) becomes more important when you have children as you now have people who are financially dependent on you.
If you have medical cover, you can typically add your children onto the policy within the first couple of months without having to do application forms etc. Some insurers even offer the first 6 months free for baby. Adding them onto your policy when they’re first born comes with advantages, such as limited medical exclusions, and it’s usually super affordable.
*Please note this information is general in nature and you should seek personalised advice to suit your unique circumstances.