Deciding to make the parenthood leap may be one of the biggest life decisions you’ll ever make. It’s also a big financial decision.

According to a recent Guardian study, 26 percent of working Americans are stressed and struggling. They lack a strong financial plan, have wrong attitudes about money, and are the least confident and satisfied with their lives. And many of these people are parents.

The good news is the stress of family planning can be mitigated with sound financial planning. Here are seven “what if” scenarios and solutions to help put your family on a path to financial confidence.

WHAT IF WE DON’T KNOW WHERE TO START?

Take baby steps, coming up with a written plan that includes a budget, short-term and long-term savings, adequate insurance, investments, and an overall estate plan. Financial planning also means tax planning. Remember to take all the dependent tax breaks for which you now qualify, which could keep thousands of dollars in your bank account.

Families with special needs children should be careful in how they save for their future: Holding too much money in that child’s name may disqualify them for certain government services and financial assistance, such as Social Security Income and Medicaid that they may need in adulthood.

WHAT IF OUR CHILDREN GET SICK?

New parents often fret about their child’s health, with every sniffle a cause for concern. Parents have one month from the time their baby is born, or adopted, to add them to their health insurance policy, known as a “qualifying event.” Miss this important deadline and you’ll have to wait until the next open enrollment period. If both parents are employed, compare health plans to see which offers the best coverage for your child.

WHAT IF WE GET SICK, OR AREN’T THERE TO TAKE CARE OF THEM?

Disability income insurance and life insurance can protect your family when you’re no longer able to financially care for them. However, it’s important to know what you have: Many employer-based plans don’t transfer if you lose or leave your job.

Stay-at-home parents should also consider life insurance. If something happens to them, would you be able to afford full-time day care and other help to replace all the tasks those parents do? In 2016, the work of a stay-at-home mom was the equivalent of a job with an annual salary of $143,102.

It’s also important to legally designate a formal guardian for your children and complete an estate plan. You want to be the one making these decisions, not a state court.

WHAT IF OUR FAMILY FACES DISCRIMINATION?

LGBTQ families in particular continue to face discrimination and challenges to their family status. While the Supreme Court’s ruling in Obergefell v. Hodges guarantees marriage equality, it doesn’t prevent a challenge to parental rights.

If your child isn’t biologically yours—regardless of whether you’re in a same-sex or opposite-sex couple—you’ll want to establish clear, legal ties to them. Being listed on your child’s birth certificate isn’t enough. Some states continue to discriminate against non-biological parents, even when they are married, and often against what the law requires.

Marriage Equality Facts, a joint campaign of six equal rights groups, recommends that every parent who is not a biological parent—married or not—get an adoption or court judgment of parentage as the surest way to ensure legal parental rights in all 50 states. Your child’s financial future can’t be secured if you don’t secure their legal status first.

WHAT IF WE GET BLINDSIDED BY AN UNEXPECTED EXPENSE?

Many American families can’t afford to take a financial hit. In the last 12 months, 60 percent of households experienced a financial shock, such as a car repair or medical emergency, with a median cost of $2,000. Of those households, 55 percent were then struggling financially to recover. This can happen at any income level: In the Guardian study, 15% of households making $350,000 or more reported they were stressed and struggling.

Families should have enough liquid savings to cover six months of expenses. Sound family financial planning should consider a goal of saving at least 15% of annual income.

WHAT IF WE CAN’T AFFORD COLLEGE?

While you can always borrow for college, you can’t borrow for retirement. Parents should first focus on funding their own retirement.

Once that’s securely in place, there’s still time to save for college. College isn’t the right choice for everyone. A financial professional can help determine a suitable plan of action for you and your child.

WHAT IF THEY WANT A PUPPY?

Part of good parenting is modeling good behavior, and that goes for financial literacy as well. There may be other reasons why you don’t want to get a puppy, but if you can’t afford the adoption fees or upkeep, explain that to your children. When your children are old enough, teach them the importance of saving for what they want by paying them to do chores or help out a neighbor.

We can’t account for all of the what ifs. Life with children will always be an unpredictable roller coaster ride. Sound financial planning can help you enjoy the ups and downs without that sinking feeling that at any moment the bottom is going to drop out.

2019-72392 Exp. 1/2021