January 14, 2020 12:00 PM PT

Essential Money Moves for New Parents

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Becoming a parent is one of the most meaningful things you'll ever do. And the most expensive.

According to a government study, you can spend about $15,000 a year on child care.

Now is a good time to make sure your financial health is in check.

To help out, we've put together 7 suggestions for you:

1. Protect your family for as little as $5/month

Bedtime stories, packing lunches, and changing diapers. You're essential to running the household.

How would your family manage if the worst should happen? Would they be okay without your income?

Getting the right life insurance can ensure your family's future. It's one of those you wish you'll never use. But you're glad to have it.

Bestow offers families up to $1 million in life insurance. Rates start at $5/month. After filling out a quick online application, you could get term life coverage in less than five minutes.

How? They use their own algorithm to underwrite policies, so you don't need a medical exam. You can even change or cancel your plan at any time.

You should think about life insurance sooner rather than later.

Buying life insurance when you're younger saves money, lots of it. It's best to do your research and get multiple quotes. To start, compare your rate on Bestow.

2. Build an emergency fund (at 20x the national interest rate)

When you start saving early, your money has more time to grow. Compound interest rates can increase your nest egg far beyond your initial investment.

But traditional bank accounts won't earn you much at 0.09% APY. Luckily, there are other ways to grow your money that don't require a high-risk stock portfolio.

The answer? CIT Bank's Savings Builder is a high-yield savings account that lets you earn 20x the national interest rate.

The minimum to open an account is just $100. Plus, there are no fees for opening, monthly servicing, online transfers, or incoming wires to worry about.

As an online bank, they don't have the expensive overhead that physical banks do. In return, they pass along their savings to customers in the form of higher interest rates.

Visit CIT Bank to start earning one of the highest APYs on the market.

3. Take advantage of 529 benefits

When you're playing peek-a-boo with the most important person in your life, sending them off to college feels like light-years away.

How can you prepare for your baby's first step into adulthood?

A good place to start is a 529 plan. It's basically a college savings plan that offers tax and financial aid benefits. Almost every state has at least one 529 plan available and each one is different.

Use SavingForCollege.com to find the best plan for you. They track performance, fees, and benefits to help families prepare for increasing college costs.

Start planning early. The average cost of in-state public tuition is $9,970 a year (not including room and board). To get ahead, set up automatic monthly transfers to your 529 college savings plan account.

4. Insure your Things for $5/month

You baby-proofed every sharp corner and electrical outlet. You researched the top-rated car seats and cribs. Your high-tech bottle warmer just came in the mail.

But what if everything was gone? Could you afford to replace your possessions out of pocket?

Burglars could sneak in while you're at work. You could lose it all in a house fire. Depending on your state, you may need to think about tornadoes, hurricanes, or wildfires.

Rent or own, it's important to secure your baby's new home. And getting a flexible insurance policy might be less expensive than you think.

Lemonade offers renters insurance starting at $5/month and homeowners insurance starting at $25/month.

With a quick online signup, you could be insured in 90 seconds. You can file a claim online or through the mobile app.

Claims are approved and paid out in about 3 minutes. If you already have a policy, be sure to check how much Lemonade could save you.

5. Earn passive income with real estate

Real estate investing is known for being consistently profitable. Over the last 30 years, real estate performed better on average than stocks. That's why it's a favorite among the wealthy.

But it's only for millionaires, right? Nope. You can get started with a minimum investment of just $500.

Fundrise lets you pool funds with other investors to purchase real estate. Then they use a strict underwriting process to find and screen projects.

Best of all? You don't need to deal with tenants, maintenance repairs, and other problems in traditional real estate. Your money gives Fundrise the capital to acquire, build, and manage projects for you.

If you're really eager to start investing, choose Fundrise's Starter Portfolio. They have low fees and it's only $500 to start. It's a great choice for beginners and the app is very easy to use.

6. Get rid of unnecessary bank fees

Annoying banking fees like ordering checks for rent, overdrafting, and ATM withdrawals add up quickly. This could easily cost up to $100 a year. Money that would be better spent on groceries and baby clothes.

If you're sick of random charges, consider Discover's Online Checking Account.

They're different from other banks. You won't see your balance shrink from unnecessary fees. There is no balance requirement and you get access to over 60,000 no-fee ATMs in the U.S.

You'll also pay no fees for:
  • Online bill pay
  • Debit card freezes
  • Replacement debit cards
  • Ordering checks
  • Official bank check (or delivery)
  • Expedited delivery for official bank checks
  • Incoming wire transfers
  • Outbound ACH transfers to another bank
  • Paper copies of checks and other deposits
  • Stop payment order
  • Insufficient funds
  • Account closure

Even better? Discover's checking account also offers cash back on purchases made with your debit card. Earn 1% cash back on up to $3,000 in debit card purchases each month. That's as much as $360 in rewards every year.

For fee-free banking, open a Discover Online Checking Account today.

7. Cancel Forgotten Subscriptions

It's safe to say many of us have signed up for a few free trials and special promos. Chances are, we're not keeping up with every expiration date.

Have you ever been surprised with a steep automatic renewal charge? I know I have (hello, unused gym membership).

Thanks to Truebill, you can save hundreds by identifying and canceling forgotten subscriptions. Subscription boxes, streaming services, loyalty programs—you name it.

It's perfect for busy moms and dads. No 30-minute phone calls, no awkward follow-ups.

Just connect your bank accounts or credit/debit cards and cancel through the app. Their team of expert negotiators will get rid of the unwanted subscription that's been plaguing you for months. Then they'll send you an email with how much money you saved.

Truebill uses bank-level security with 256-bit SSL encryption and read-only access to protect your information.

Stop wasting money on monthly charges. Download the app on iOS or Android now.

Disclaimer: Opinions expressed here are author's alone. Please support CreditDonkey on our mission to help you make savvy decisions. Our free online service is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content.

More from CreditDonkey:

Life Insurance for New Parents

Best Online Savings Account

Passive Income


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