May is Maternal Mental Health Month. Becoming a mum can be extremely stressful with 80% of new mothers experiencing the ‘baby blues’, which can spiral into more serious mental health issues. Preparing financially for the huge changes that becoming a parent bring, can help maintain mental health. Here are six financial steps you can take before your baby is born to ease stress.
Mental health risks for new mums
While hormonal changes make it entirely normal to feel the baby blues when you have just given birth, these mild feelings sometimes spiral into something more serious with 1 in 8 women in the US experiencing symptoms of postpartum depression.
It is a fact that mental health is strongly linked to financial health, and while it would be facile to claim that financial planning can cure mental health problems, financial security can undoubtedly ease feelings of stress and anxiety.
Knowing that you have put robust systems in place to financially support your baby means one less thing to worry about after they are born! That’s why it makes sense to do some financial planning before their arrival.
But what exactly should you be doing to financially prepare for parenthood?
Read on to find out the six essential financial planning tasks to complete before your baby is born.
Six financial planning must dos for mums-to-be
1. Set out a budget
If you aren’t already working to a budget, now is the time to start. Winging it financially may be doable (although not advisable) when you only have yourself to look after, but it is entirely unacceptable when a helpless infant is depending on you.
Babies are small but surprisingly expensive. You will need to budget to buy some big-ticket items such as a cot, buggy and car seat, as well as to cover ongoing needs such as nappies, regular new clothes and (possibly) formula. All this at a time when household income is likely to fall if you are taking maternity leave or stopping work altogether. Down the line you may also need to budget for childcare if you are planning on returning to work.
Ensure you are clear on how much is coming in and going out each month, make sure income exceeds expenditure and, if necessary, identify areas where savings can be made to cover additional costs.
You’ll find advice on one way to budget here.
2. Take out life insurance
While we would argue that most people should have life insurance in place, it becomes non-negotiable when you become a parent. Unpleasant a thought as it is, you need to ensure that your child will be financially provided for if you die unexpectedly. Put in place sufficient cover to maintain your family’s standard of living, which may well be more than you think. It’s advisable to consult a professional financial planner who can crunch the numbers with you and check that you have all bases covered.
3. Think about education fee planning
Babies grow up fast! Before you know it, your tiny bundle will be off to school. Many parents in Asia want their children to attend private international schools, which don’t come cheap! And then there is university to think about if you want to give your child the best possible start in life. Planning ahead for both school and university is essential to spread the burden of these significant costs as much as possible.
Infinity have advised thousands of parents on education fee planning and would be delighted to help you put a strategy in place.
4. Write a will
The only way to ensure that your assets are distributed according to their wishes upon your death is to write a will. Depending on your situation, it may be advantageous to use additional estate planning tools such as a trust. Don’t take any risks here: seek professional advice, especially if you have cross-border issues to consider. Get a will, or wills, written to safeguard your estate before your baby is born, while you still have some free time!
5. Nominate a guardian
An additional task for parents is to ensure that a guardian is nominated so that this decision is not left to a judge whose opinion on the best caregiver for your infant in your absence may be different to yours. Nominate your child’s guardian clearly and unequivocally in your will to leave no room for doubt.
6. Keep saving into a pension
Your baby’s financial future is important but so is yours. It is critical to secure your future financial independence by continuing to plan for your own retirement. Ensuring you won’t ever be a burden on your child is a great gift to them. Keep saving for retirement by factoring pension payments into your budget if you can.
Becoming a mum is a game changer in so many ways – be prepared for an emotional rollercoaster! And reduce the likelihood of anxiety becoming one of those emotions by preparing financially as much as possible in advance.
Getting your finances in order by taking the six steps outlined above will not only give your child the best possible financial future, it will also make you a brilliant role model for them to emulate and pass on to future generations.
If you would like any assistance with addressing any of the above areas of your financial planning, our professional advisers are here to help. Many of them are parents themselves and all of them have a wealth of experience assisting expatriate families in Asia with holistic financial planning to meet all their goals. Contact us to arrange an initial chat.
A leading provider of expat financial services and wealth management services across Asia.