Your symptoms: giant belly, additional stress, a ticker-tape style worry list and recently your shoe-tying requires spousal support. Congrats - you're having a baby! Having a baby changes everything, the least of which is your finances and complete financial plan.
We Recommend: Getting things in order, sooner rather than later. Once that babe arrives, there are a few financial things that you need to do within a certain amount of time, like adding that child to your health insurance plan and considering life insurance and estate planning. There are many other things that need to be done in a less timely manner like education savings plans, budget updates and revisiting beneficiary designations on tax deferred accounts. However, with the latter items, it seems the more time we have, the more we put them off. And that can have serious, detrimental consequences.
Start with this check list.
1. Health Insurance,30 days within birth: Add your child to your work-sponsored health insurance plan within 30 days of the birth. If possible, fill out this paperwork beforehand.
2. Other Dependent Benefits: your employer or your spouse's employer may offer dependent care benefits. Be sure to know what your employers offer and if you qualify. Additionally, you may qualify for other tax benefits. Talk to your CPA about what you may qualify for as far as dependent care for your children.
3. Get an Estate Plan: Create a will with guardianship in the event that something happens to you and your spouse. It's a tough conversation to consider who will take care of your most precious loved one, but it's better that you have a say in that decision vs the state making that call.
4. Life Insurance: Now that someone else depends on your income, consider life insurance or increasing your life insurance.
5. College Savings: Set up a 529 college savings plan sooner rather than later. Set it up, even if you cannot fund it with more than the minimum investment because you have high debt to pay off or are in the process of funding your emergency cash reserve, at least open the account. You may be surprised at who else would like to contribute. And anytime you receive cash for your child as birthday or baptism/etc gifts you now have an account for the benefit of your child where you can deposit these funds.
6. Everything Else: If you get through all of those, now is a great time to get the remainder of your financial planning items in order like your budget, debt planning, net worth snapshot, income tax planning etc.
Great news! The Pocketnest app is now available for iOS! Download Pocketnest and get your finances in order—in just 10 minutes a month! No jargony finance-speak, pricey fees or in-person meetings required. Download now!
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