When your family grows, you’ll find some of the biggest changes you make have to do with money. If you have a baby, will someone take time off work? For how long? If your income drops, how will you cover your costs? The sooner you make a plan, the better.
Four big money questions for growing families:
- How will we handle the family income? Some new parents decide to share everything. They may take turns taking time off work to be with the new baby. They have a joint account and they share all the bills, even if only one partner has a job. Other parents keep everything separate, or share just a few things.
- How will we spend our money? For instance, agree on how much you each can spend without checking with the other, such as $100 or $200. For bigger purchases, you’ll talk together first. Agree on a plan for paying the bills, including who pays what. How will you support children from a previous marriage?
- How much will we save? The experts say you should always pay yourself first, even if it’s just $10 each week from your pay. Some day, you’ll be able to use this money to buy things you want or need, like a car or a home. You might also want to save for your children’s education.
- How do we take care of our family if life changes? Discuss what will happen to your money if one or both of you dies. If you had insurance at work, and take time off for a new baby, check to see you are still covered. The person who works outside the home may want to increase their insurance coverage to provide enough protection for the non-working parent.
Remember: A bigger family means bigger concerns about money.
Make sure you discuss your views. Then, work out a common approach you can both live with. If you find it hard to agree, a visit to a financial adviser may help.