From Nesting To Investing: What You Need To Know About Your Baby and Money
By Emily Turilli, Editor In Chief at Benjamin Talks
Nikki Boulukos and Carissa Jordan first met a decade ago as young analysts at Goldman Sachs. Ten years later, they happened to reunite in the same New York City suburb as friends and neighbors raising their young children. Nikki and Carissa founded Benjamin Talks with a mission to make all kids financially fit, no matter what their circumstances.
Read on to hear their expert advice on all things family & finance.
In those early days of pregnancy, it seems expectant parents have to learn a whole new language. Bugaboo, DockATot, Snoo & Jumperoo...at times the laundry list of recommendations for one tiny human can feel overwhelming. While parents-to-be happily stock up on the hottest baby items, book those post-birth newborn photo sessions and labor (no pun intended!) over the most perfect baby name, many ignore the less glamorous, though equally important tasks ahead of them. It’s essential to take stock of the growing family’s financial fundamentals before Baby even arrives on the scene.
Thrilling, we know. But having secure financials might be the most impactful thing new parents can do for their child. And it doesn’t have to be difficult. We break it down for you so you can check these tasks off the list and be armed and ready for Baby’s arrival.
Build a Baby Budget. Babies are expensive. Like, really expensive. Don’t let the drain on your finances take you by surprise. With your partner, make a simple budget to get a grip on how things will change after Baby’s birth. From the big things (childcare!) to the little (weekly cost of diapers), leave no stone unturned so you know just what to expect when you’re expecting. Most importantly? Make sure you and your partner are on the same financial page and have frequent check-ins to reevaluate your spending as Baby grows.
Healthcare, Insurance and Wills, oh my! Well this sounds like a barrel of laughs. While these tasks rank right up there with a requisite DMV trip, you’ll feel good once you’ve taken them off your to-do. First, fill out the necessary paperwork in advance so you can add Baby to your health insurance within 30 days of his/her birth. Next, if you haven’t already, now is the time to buy life insurance. For young, healthy people it’s a minimal investment for maximum peace of mind. As Carissa advises, “Hedging downside risk is equally important as investing in the future. Think of life insurance as a safety net for the worst case scenario.” Finally, make (or update!) your will. We know, this feels scary...but it’s essential that you appoint a guardian for your baby-to-be.
Plan for the future. In 18 years, college will cost nearly half a million dollars per child. Yes, you read that number right. The solution to this staggering sum is to start small and start early. By opening up a 529 plan, parents can slowly chip away at that colossal number. These tax-advantaged savings accounts help parents fund both K-12 and college educations and are available in all 50 states. “Whether parents can invest $10 or $10,000, the benefits of compounding and tax-free growth are profound. There is simply no better way to invest in your kids than by planning for their education,” says Jordan.
Invest wisely in your babe. Savings accounts are so last year. It’s time to bring Baby into 2021 by setting up a digital investment account in his/her name. Innovative apps like Early Bird make it easy for parents, grandparents, godparents, etc, to directly contribute to your little’s growing nest egg. The sooner you turn those cash gifts into investable dollars, the better. Let compound interest work its magic and by the time your babe reaches 18, she might have a sizable amount to her name. “While there is no doubt the best things in life are free,” says Nikki, “building a financial foundation for young children helps them know their worth, no matter what path they choose to take in life.”
It goes so fast, they say. Well ain’t that the truth! Before we know it, that little tot will be ready to strengthen her own financial fitness by practicing delayed gratification, basic budgeting and purposeful spending, saving and giving through allowance. From the belly to the baby to the big kid, it’s never too early (or late!) to build a financial foundation.
Want more bang for your buck? Benjamin Talks offers free content to help parents and kids alike become fluent in finance. Visit https://www.benjamintalks.com/home to learn more.