If you’re a new parent, or even if you’ve been one for a little while, you’re no doubt filled with the many joys your child brings you. But as caught up as you are with the feelings and experiences of today, you also need to think about the future – specifically, the financial issues that accompany a growing family. What are some of the key factors you need to consider?

Here’s a “checklist” to consider:

• Establish a budget. If you’re going to meet the additional expenses of a child, plus make progress toward other objectives, such as paying down debts, you’ll need to know where your money is going. Setting a budget, and sticking to it, may seem difficult, but once you’ve gotten into the habit, it will become easier – and for many people, following a budget actually gives them more of a sense of control over their finances. Over time, expenses related to your children will change, so you’ll need to adjust your budget accordingly – for example, once a child is in school full-time, childcare expenses may drop, which could allow you to boost your savings.
• Protect against the unexpected.If something were to happen to you, how would your child, or children, be financially impacted? Even a family with two working parents can face serious financial difficulties if one of the parents were to die prematurely, or even just drop out of the workforce temporarily due to illness or injury. To help ensure your family could still stay in your home and your children could still afford to pursue post-secondary education and other goals you may have, you’ll want to create an appropriate protection strategy involving both life and disability insurance. Your employer may offer both, but the coverage provided may not be sufficient for your needs, so you may need to purchase your own policies. And here’s another protection-related idea: Try to build an emergency fund containing three to six months’ worth of living expenses, with the money held in a low-risk, liquid account. Without such a fund, you might have to tap into your longer-term investments to pay unexpected costs, such as a major car repair.
• Prepare for the high cost of higher education.You may already be thinking about sending your child to post-secondary school. And it is indeed a good idea to start planning early because school is expensive, and it’s getting more so every year – the earlier you start the more time you have to save. However, you can prepare for these expenses through an RESP (Registered Education Savings Plan). A financial professional can help you pick the investment, or investment strategy, that’s appropriate for your needs. But whatever route you decide to follow, you won’t want to wait until your child is close to graduating.
• Keep long-term goals in mind.Even while planning for the costs associated with raising a child, including saving for post-secondary school, you can’t forget your other long-term goals. It isn’t selfish to build resources for your own retirement – in fact, you’ll ultimately be helping your family greatly by taking steps to maintain your financial independence throughout your life. So, during your working years, try to consistently contribute as much as you can afford to your TFSA (Tax Free Savings Account) and your RRSP (Registered Retirement Savings Plan) or other employer-sponsored retirement plan.

Having a child is obviously a life-changing event, and one with considerable financial challenges – but they can be manageable.

Talk with your Edward Jones financial advisor about how we can help you plan for changes that life might bring you.

Insurance and annuities are offered by Edward Jones Insurance Agency (except in Québec). In Québec, insurance and annuities are offered by Edward Jones Insurance Agency (Québec) Inc.

This article was written by Edward Jones for use by your local Edward Jones financial advisor, Nicolle Lalonde.