Nothing can prepare you for becoming a parent for the first time. But once the new arrival has settled into your family life, it is imperative to take some time out to ensure you have all essential financial avenues boxed off. Here are some of the main action points I advise my clients to do when they become parents. 1) Review your life cover When it was just myself and my wife, we were happy with the bog-standard Mortgage Protection Plan, whereby the mortgage would be cleared in the event of one of our deaths. A more substantial conversation and examination is needed once you have children. If you or your spouse were to die, your mortgage would be gone, but so is that person’s income. If the spouse was earning €50k per annum and died at age 40, for example, they would have earned €1.25 million had they reached age 65. What will replace that income in the home? How much money will be needed to replace that income to raise your child/children? Your financial planner will use a life cover calculator to help you establish what you need and the corresponding cost. The younger you apply for this cover, the cheaper it is, so look at it sooner rather than later. 2) Start an Education Savings Plan According to Zurich Life, the cost of putting a child through full-time education can range from €28,884 to €66,152, depending on where the student lives*. This is a massive amount of money to have available if your child decides they want to attend Third Level. I recommend, where possible, saving something every month from when the child is born to build up a nest egg that will be there to allow for this. Many of my customers box off some or all of their children’s allowance (see rates for 2024 below) if their circumstances allow it.
