Becoming a parent for the second time is a wonderful feeling—plenty of parents are even more confident about late night feedings and diaper changes the second time around. As your family grows, it’s also important to acknowledge your changing financial dynamic and make the necessary adjustments. Here are a few things to prioritize after you’ve had your second child.
Increase your emergency fund
Emergency savings can help you take care of unanticipated travel costs, medical bills, home repairs, and even lost income. It’s important for your emergency fund to keep up with any changes in your life, especially as your family grows. Another child naturally means more expenses, so ensure that your savings reflect the requirements of your growing family.
Add them to your health insurance
If you get health insurance through your employer, contact human resources and ask about adding your child to your plan. This process is relatively easy. When you have a child, you can take advantage of a special enrollment period to change your coverage or include your child.
If you’re self-employed and pay your own health insurance premiums, contact the insurer to inform them of the birth of your child and find out how to include them in your plan.
Update your life insurance coverage
Second-time parents may want to reevaluate their life insurance coverage to account for their new dependent. You’ll want to ensure that your coverage is enough for both children’s future expenses. Parents on their second child might even consider permanent life insurance, such as whole life insurance or universal life insurance. These policies come with a guaranteed death benefit and other provisions like a cash value component.
Look into childcare options
If you’re on your second child, chances are you’ve figured out what works with childcare. Parents who are receiving childcare benefits from work can talk to HR about how a second child affects the set-up. Others may want to contact their childcare providers (especially daycare centers) and enquire about the possibility of a discount – some centers offer a small discount if you enroll a second child.
Consider long-term expenses
Over time, you may find that your car or your house are too small for your growing family. One-child families may be comfortable in apartments, but the arrival of your second child may push you to consider buying or renting a house. Big changes like this require significant financial planning, so you may want to start researching your financing options early on.
It’s not always about a bigger house or car; there may be other considerations too. Perhaps you may want to move closer to your parents or in-laws so they can help with the kids. Or you may want to trade crowded city life for the suburbs. It helps to discuss these issues with your partner so you can determine how future changes may affect your finances and budget.