JACKSONVILLE, Fla. — You're having a baby? Congratulations!
But, fair warning: raising a child is very expensive, so it's best to be as prepared as you can be. It can cost around $233,000 to raise a child, according to the United States Department of Agriculture.
First Coast News asked financial planner and fiduciary Kendal Cann what she tells her clients who come to her and say they are expecting. She owns Privileged Planning Incorporated in Jacksonville and is a mother of two, so she has double the level of experience needed to help.
“If you’re pregnant or a new parent and you’re coming to me, I’m going to say start saving for extracurricular activities right now,” Cann said. "When they’re little, they’re cheaper. So, I’d suggest while they’re little, save for when they’re older."
Cann's first piece of advice would be to open a "dump account" and put $20 a week in it, $50, 100 bucks, whatever you can afford.
Then, setting up an emergency fund would be the second piece of advice, as you'll need several months of your must make expenses saved, Cann told First Coast News.
“Pre-children, I want you three months of that non-discretionary spending saved," Cann said.
But, adding in kids, Cann said: "I want you to add three months of savings for every child."
She says life insurance is a must, she personally recommends term life over whole, though that's a debate that other planners may go back-and-forth on. She also says that there's no debate on have at least some kind of life insurance.
On top of those two things, Cann says disability insurance will be important, too.
"If you get hurt at work, you can still get that steady monthly income and that's so important," said Cann.
As a last word of advice, Cann recommends not letting saving for your kids' education fund hurt your own retirement savings.
“And just like in an airplane where they tell you to put your oxygen mask on before your child, this is the same thing,” Cann said.
For example, she says if you have $1000 to save every month for education or retirement, $750 of that should be dedicated to your own retirement and $250 could be used for their college fund.