7 Financial Moves to Make Before Your Kid Turns 5

A father takes a break from his work to play with his kids.
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Life gets busy, especially with a kid under 5.

You go from sleepless nights to messy mealtimes to curious toddlers to, suddenly, tiny humans who talk and have (very strong) opinions. Then, before you know it, they’re in school.

At this point, you definitely know how expensive kids are — we don’t have to tell you that. But we wanted to check in: How are you feeling financially? As your kid gets older, you’ll face even more expenses (e.g. school activities, clothes, food, etc., etc.).

Before you get too overwhelmed, make these seven smart money moves before your kid turns 5. Heck, you can do many of these by the end of today!

1. Secure $1 Million in Life Insurance for Just $5/Month

Have you thought about how your family would manage without your income?

“The biggest mistake I see millennials making is being duped by insurance salesmen,” says Andy Yadro, a financial planner with Googins Advisors in Madison, Wisconsin. “Everyone needs insurance, but a very small subset of young people need the insurance that is sold by most ‘financial advisors.’”

You might still consider a basic life insurance policy, which can be useful if you have loved ones who rely on your income — a significant other, a child or even a relative you help out financially.

If you’re under the age of 54 and want to get a fast life insurance quote without the medical exam, pushy sales calls or even getting up from the couch, check out Bestow. The company is built around one concept — helping you get the term life insurance policy you want, simply and fast.

It just takes five minutes to answer some basic lifestyle questions, and you can get quotes for up to $1 million in coverage without a medical exam. If you’re approved, you can personalize your coverage to fit your budget. You can change or cancel your plan at any time.

2. Get Free Gift Cards When You Load up on Groceries

A pre-school age girl walks alongside the shopping cart at the grocery store with her parents.
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As your kid gets older, you’ll probably notice your grocery bill go up and up. They’re growing fast and need the fuel. Plus you’ve got to plan for their school lunches — every parents favorite chore, right?

But what if you could turn your grocery receipts into free gift cards? That’s be nice, right?

It might sound too good to be true, but a free app called Fetch Rewards will turn your grocery receipts into gift cards. It partners with tons of brands to give you points for every grocery receipt you share. Then you can exchange the points for gift cards to places like Amazon, Walmart, Chipotle and dozens of other retailers. 

And it’s perfect for those of us who don’t want to put a ton of work into this. All you have to do is send Fetch a photo of your receipt, and it does everything for you. No scanning barcodes or searching for offers — and you can use it with any grocery receipt.

When you download the app, use the code PENNY to automatically earn 2,000 points when you scan your first receipt — you’ll be well on your way to your first gift card.

So next time you’re packing lunch for your kid, think about all the things you can buy with an Amazon gift card.

3. Pad Your Emergency Fund

We all know kids can be a bit reckless. They think jumping off the jungle gym is a great idea… until they break their arm. Or maybe you look away for literally two seconds and they’ve burned themselves on the stove. How did they even reach that high?! 

You never know what’s going to happen, so it’s best to be prepared for unexpected accidents with an emergency fund.

If you need some help getting started — or padding your existing one — try banking with Chime. This free online bank gives you the option to put 10% of your direct-deposit paycheck away into your savings. The money adds up quickly, and it’s completely automatic.

We talked to Samuel Demeny who was able to save up $1,250 — without even thinking about it.

Opening a Chime bank account takes five minutes, and you get access to its checking and savings accounts.

You can’t always prevent your kid from making a reckless decision, but you can at least be prepared financially.

4. Check in With Your Budget

At this point, you know how expensive it is to raise a kid. Yes, it’s totally worth it (ahem, most of the time), but it’s important to keep tabs on your budget, especially because, as your kid grows, your expenses likely will, too. (Think: After-school activities, clothes and sports)

Keep tabs on these new expenses as they pop up so you can keep your budget updated accordingly. And if you don’t already have a budget? We like the 50/20/30 budgeting method. It’s super simple.

Here’s how you’ll allot your income:

  • 50% goes toward essentials — yup, that’s your kid stuff.
  • 20% goes toward financial goals — think: that emergency fund.
  • 30% goes toward personal spending — this is basically your catch-all category.

5. Don’t Forget About Retirement… 

We get it. Retirement seems so far away, especially when you’re just trying to get through the day-to-day. However, once your kid is out of the house, you’re going to start counting down until retirement.

Don’t let it slip!

If you have a 401(k), kudos for that… but is it doing what you need it to?

If you’re like most people, you have no idea whether your 401(k) is on pace for your retirement or just sputtering along.

Chances are, your 401(k) could be doing a lot better. Take control with help from Blooom, an SEC-registered investment advisory firm that can optimize and monitor your 401(k) for you and keep it speeding toward retirement.

It just takes a few minutes to get a free 401(k) analysis that will show you whether your investments are allocated properly and whether you’re losing money paying hidden investment fees. It’ll even tell you just how much more money your account could earn by the time you want to retire. 

After that, if you sign up, it’s just $10 per month to have Blooom monitor and maximize your 401(k). Bonus: Penny Hoarders get a special rate of $99 per year with the code REEETIRE.

6. Finally Pay off Lingering Credit Card Debt

Feeling like you’ll be stuck forever with credit card debt? We get it: Those insane rates are no fun, but now that your kid is growing up, it’s time to break free from the cycle.

Luckily, a website called Credible knows how to get you a better deal — and you could have your credit card paid off by tomorrow.

Here’s how it works: Credible will match you with a loan that’ll cover your credit card tab. Use that loan to pay off your debt, then make monthly payments to repay the loan. It could lower your monthly payments and help you pay off that debt a lot faster.

Credible won’t make you stand in line or call a bank. And if you’re worried you won’t qualify, it’s free to check online. It takes just two minutes, and it could save you thousands of dollars. Totally worth it.

Now you can finally breathe a little easier!

7. Stop Giving Your Car Insurance Company Extra Money

If you need to free up some money in your budget but those monthly bills keep holding you back, look into simple ways to lower the tabs. One of the easiest bills to save on? Car insurance.

If you really want to get the best price on car insurance, experts say you should be shopping twice a year.

OK, we can hear you laughing from here. Who has time to do all that?

But seriously, insurance companies take a lot of factors into consideration, and they change all the time. Ipso facto — you’re paying too much.

Thankfully, a free website called The Zebra will do the shopping for you — in just two minutes. 

All you have to do is enter basic information about your car and driving history, then The Zebra compares prices from more than 100 companies to find you the best price.

The Zebra says it saves its users up to $670 a year.

If you find a policy you like, you can sign up online instantly.

Carson Kohler ([email protected]) is a staff writer at The Penny Hoarder.