A Financial Checklist for New Parents
Over the last couple months we’ve discussed questions to ponder before bringing home baby, and explored how to manage pregnancy and baby costs. Today, for the final post in our Maternity and Finances series, we’re offering up a financial checklist for new parents.
So get out your spreadsheet, pour your Big Gulp-size coffee, and strap that precious, compliant baby of yours onto your well-rested back while you hammer out a financial checklist on the treadmill.
Or maybe just grab a donut and turn on Paw Patrol to buy yourself a few minutes.
Still need health insurance?
Giving birth qualifies you for a special enrollment period, so even if you did not have insurance before, you could be covered for any post-partum services you need.
Here’s more information about special enrollment periods and how to apply.
And don’t forget about your baby! Tiny as they may be, newborns need health coverage, too. Check here to see if they might be eligible for the Children’s Health Insurance Program (CHIP). Making sure you and your little one have solid health coverage is the first step in any financial checklist for new parents.
Make sure your beneficiary information is up to date
If you have life insurance, retirement savings, or other similar resources, you likely designated beneficiaries in the event something were to happen to you. Now that you have a newborn, don’t forget to make any necessary updates.
Make a will
Now that you have a dependent, it’s important to write down your wishes should anything happen to you or your spouse.
Who should get custody of your child?
What should happen to your assets?
These are big questions to ponder, so don’t wait until it’s too late to make your intentions known and legally binding.
If you’d like professional guidance regarding your will, a licensed estate planning specialist can help. It should cost somewhere in the ballpark of $500-$1,000 to have a professional will written for you. Or if you prefer to do it yourself, there are plenty of websites offering such services.
Sheesh, already? YES! Many states offer matching grants when you open a college savings account (also known as a 529 plan) for your newborn. But some have a limited period of eligibility, so do your homework to make sure you don’t leave money on the table.
Trim your budget
You might have noticed a striking correlation between increased expenditures and the arrival of your baby. Now that there’s more money flying out the door than you might have anticipated, it’s a great time to add to your financial checklist a thorough review of your budget. Try to trim as much as you can.
To save a few bucks, you can go to baby consignment shops for clothing and toys, or get coupons for formula or diapers.
Keep a sharp eye out for deal/discount emails. Check out Amazon Family.
Take care of your mental health
Make sure you get tax advantages for child care
There are two options for getting tax benefits on money you pay for child care. Many employers offer a Dependent Care Account. You can contribute up to $5,000 pre-tax dollars, and submit your daycare receipts for reimbursement. If you don’t claim it, you lose it.
There is also a tax credit of up to $3,000 per child for child care expenses, but any funds put into your Dependent Care Account are subtracted from this credit. So if you only have one child and you use a Dependent Care Account, you won’t be able to claim the tax credit as well.
You’ll need to do some research to work out which of these options is better for you.
Last but not least in your financial checklist: Take your maternity leave
Now that you’ve ticked all the other boxes on your financial checklist, the last thing is to sort out your maternity leave. Before you do, be sure to research what exactly you are entitled to thanks to the Pregnancy Discrimination Act and Family and Medical Leave laws. Know your rights!
After securing your leave, it’s time to go treasure that sweet little angel!
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