PERSONAL FINANCEName

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Personal Finance

21. HOW TO MANAGE THE FINANCIAL SYSTEM FOR

EXPECTANT COUPLES• For the couples expecting a child in three months, it is a great experience for one to expect a

child, it however comes with a number of responsibilities. The financial house has to be made ready before the three months are over when the child is born. This will make it easier when the child is born. This section of the report will focus on the a number of things that have to be considered like: • assessing insurance deductibles• paying debt and saving money.

• This will safeguard the child’s future and help them to grow up with healthy and a solid education background.

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CHECKING HEALTH INSURANCE DEDUCTIBLES

• One would have to look at the insurance coverage so as to get a bigger picture of how much to expect. This would be done by getting in touch with the benefits department so as to pay out for deductibles and co-pays. This will rely on what one earns. In regard to the US Agency for Healthcare Research and Quality and the American Association of Birth Centers, the common cost with limited complications in 2010 laid at $10,166. This lays on the fact that the mother is unaware of what will happen when she delivers. Additionally, one will have to plan for increased premium any expenses like vaccinations. A number of things may not be considered so one has to check with the insurance.

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PAYING OFF CREDIT CARD DEBT

• For parents, it is a strain on the finances. It is bound to get even harder when one has credit card debts of 22 percent interest rate. This should be done prior to the birth as it will be of help when the baby comes along.

• Protect Child’s Future with estate planning and life Insurance• Every person has to acquire a life insurance policy. A young family with limited luxurious life

and medical issues, one can acquire a $100,000 10-year policy for $100 annually. Most preference would be a term policy as it is cheaper and covers for a good life time.

• At least, acquire life insurance for main bread winner though it is advisable for the two parents prior to the baby coming. Most people would not consider life insurance but it is necessary as it makes sure the life of the child is in good hands if anything happens in the future. The rule of thumb states that one ought to undertake a life insurance of about ten times one’s income. It may appear expensive but one may consider disability insurance for an extended period. Lastly, one can plan estate divisions for the future.

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CREATE A BUDGET

• There are number of things that parents may consider expensive like diapers and formula. However, they are relatively affordable in regard to things like daycare and tuitions in the future. This things call for a better picture of the money one has that goes in and those that go out on a monthly basis.

• A report, ‘Parents and the High Cost of Child Care’ show that the yearly cost for day care for children that have not started going to school operates from $4,600 to $15,000. Through the creation of a budget, one is able to get areas that they are able to trim so as to add to other areas for the expected child. This is good way to make the finances be in good order. It is more so when the mother stays a home with the child or acquire a minimal short-term disability. Additionally, it is of great significance to consider the charges of taking time off for maternity. One has to take into consideration how being leave would affect income and the rise of expenses.

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SAVE AND AVOID OVERSPENDING ON BABY STUFF

• With the three months to when the child is expected, one can save prior to the baby comes. Through analyzing the budget, one ought to begin trimming and placing aside some money for delivery costs and starting charges.

• There is a trend for parents to overspend for the fun things. Getting a premium crib, car seat or toys ought not to be acquired at the loss of the parents to run on debts. They should be done in a systematic manner with consideration for the basic things. Additionally, baby showers are a good way to get necessary items so that one cannot spend on the same things.

• It is advisable to open and finance an Education Savings Account when the child comes. By compounding, small constant investments, it can increase over a period of time. Beginning with $100 on a monthly basis and acquire a 6 percent return, one can acquire $30,000 till the child is in high school. From this, $16,000 would have been acquired from growth. This could similarly be finance through a student’s loan for the child’s education to be secured.

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2. AVAILABLE SOURCES OF FINANCIAL SUPPORT FOR FAMILIES EXPECTING NEW BABY

• There are a number of sources of financial benefits that the family could acquire while expecting the baby. This benefits or financial support could either be before the child is born and after the child is born. These benefits could be acquired by both employed and unemployed parents.

• Benefits while on Maternity Leave

• When one is pregnant, there are a number of benefits one is entitled to with regard to the situation. This can be acquired as a first time of already acquired. This could in terms of weekly income through the Welfare Rights Team.

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PRIOR TO THE BABY IS BORN

• Employed or recently employed mother is able to seek statutory Maternity Pay or allowance while the father could seek paternity allowance. While for either the parents are not working or on a low salary, they are able to acquire a Maternity Grant to facilitate with the cost of the expected baby; fruits, milk and vitamins.

• Similarly, while on leave, there are other benefits while one is one leave, like:

• Working Tax Credit and Child Tax Credit for those with children.

• Housing Benefit or Council Tax Support for those on low wages.

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PRIOR TO THE BABY IS BORN (CONT’D)

• There are however, cases that expectant mothers or fathers are not able to get benefits and they work on low wages. They are similarly able to acquire varied financial supports for their child. They are entitled to certain benefits:• Jobseeker’s Allowance• Income Support• Employment Allowance

• The money that one acquires relies on the income and case in point or state of the expected child. This may vary dependent on the financial wealth of the family or the health of the child.

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AFTER THE BABY IS BORN

After the baby is born in the slated three months, the parents are able to claim• Child Benefit• Child Tax Credit

• If one get tax credits, they are to get in touch with HMRC in a month so that they change the claim for an expect baby. This could be claimed for the first time or consecutive times from Child Tax Credit offices.

• Health costs

• When the child is born, he or she is entitled for free subscription and dental checkups. This is an automatic assistance for those that got babies in the last one year, one requires a genuine maternity exemption certificate. After this period has expired, one is able to get this help with regard to the situation.

• Registering the birth

• One will have to have the child’s birth certificate to acquire this benefit. So one should not take much time in registering the birth as it takes up to one and a half month. An appointment is necessary with relevant office. Delaying in getting the baby registered will make it hard to claim the benefits one is entitled to have.

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AFTER THE BABY IS BORN (CONT’D)

• When the maternity benefits stop

• Parents with children are supposed to get details on when the financial support ends. This is vital as it would enable the family to start supporting themselves and not run into problems. Other benefits are still available and one would enlist for them like jobseeker’s allowance. For couples, the joint income will have to be taken into consideration.

• Assistance with childcare costs

• If one claims for Working Tax Credit, they are able to acquire help with ‘valid’ childcare costs as they work. Additionally, this will be of help as they go on leave. This is of great help to the family as the child will be able to grow with the basic needs that they need.

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REFERENCE

• Keown, A. (2012). Personal Finance: Turning Money into Wealth. New York: Pearson Education

• Sourced: info