DOLLARS AND SENSE

Common sense answers to questions on personal finance

by Joe Plemon 

Q: Joe, we are going to have our first baby in a few months.  What things should we be thinking about that will help us be wise with our finances? 

A:  The following ideas should help:

·         Have a budget.  I realize that everyone needs a budget, but if you don’t have one in place, now is the time to get it working.  The good news is that babies don’t cost as much as society tells you.  The not so good news is that, as money grows tighter with a little one in the house, not having a written cash flow plan in place can get you in trouble.  Turn the TV off and plan an evening with your spouse to prepare a budget.  You will be glad that you controlled your life instead of letting it control you.

·         Have proper life and disability insurance in place.   Ask yourself this question:  “If something happens to my spouse or me,  how will the remaining spouse be able to care for our child and continue to pay the bills?”   You probably spend more eating out in a month than life insurance and disability insurance premiums would cost, so you absolutely can’t afford to not have them.

·         Make retirement investing a higher priority than college savings.  You may be tempted to start a college fund right away, but don’t sacrifice your retirement investments.  Junior has lots of options to cover college expenses, such as scholarships, work  and attending community college and state universities.  What alternatives to retirement do you have?

·         Make a will.  If both of you die without a will, the courts will decide who cares for your child.  Is this what you want?  Make a will so you can name  the guardian that you want.  Not having a will is just plain irresponsible.  Do it today.