Deciding to start a family is one of the most significant decisions couples make. Although there are many wonderful emotions associated with having children, it also involves several financial aspects that need consideration. Luckily, there are numerous resources available to families which will help them plan for their future and guarantee they have enough capital to support their expanding family. In this article, you’ll find out about some of these tools as well as advice on how you can use them in order to maximize the benefits your family’s finances receive.
Savings Accounts
Savings accounts are one of the best tools couples starting a family should consider. Not only do they provide you with the ability to set aside money for unpredictable and emergency expenses, but they also help create a safety net for your family’s future when it comes to major expenses. Any money you hold in there will also gather interest that grows your money over time. Setting up savings accounts allows you to establish a financial plan and budget that allows you to manage your money in the most effective and efficient way.
Tax Breaks
One of the most important aspects to consider when starting a family is taking advantage of all the tax breaks available. Couples who are expecting may be eligible for the Child Tax Credit, which is worth up to $2,000 per child. If you choose to adopt, you can recoup nearly $15,000 in costs through tax credits. In addition, there are credits available for medical expenses and college tuition payments that can be utilized to reduce their tax burden. Couples should also make sure to take advantage of any state-level deductions or tax credits that may be available to them. In some states, there are credits specifically for families with children that can provide additional savings to help offset the cost of raising a family.
Retirement Accounts
Retirement accounts are another way to help fund the expenses associated with having a family. Couples should consider taking advantage of funds from retirement accounts after giving birth or adopting in order to plan for their future expenses. For example, they may be able to utilize funds from 401(k) plans, traditional and Roth IRAs, and other retirement accounts to pay for childcare and other costs associated with raising a family. That said, retirement should be saved for… well, retirement as much as possible. Only consider pulling from your retirement if you’re low on options.
Starting a family is an exciting and momentous occasion, yet it can also be quite overwhelming due to the financial implications. Being informed of the available resources is essential in order to ensure your success both mentally and financially! So before embarking on this journey, take some time to do research and learn about all of the potential strategies that could help you manage your budget while still providing for your loved ones. With proper preparation and planning ahead, you will set yourself up for lasting success as parents!
Check out this article on why having kids is so expensive!