5 Smart Money Moves for New Parents
There’s so much to plan for when expecting a baby. Among them are preparing the birth plan, decorating the nursery and stocking up on supplies. But something many expectant parents overlook are the important financial steps to take before or right after the baby’s birth. Here are five things all new parents need to do:
Complete Important Paperwork — Before leaving the hospital, remember to ask a nurse or other staff member for the paperwork needed to get your child’s birth certificate and a Social Security Number (there’s a good chance they’ll offer it before you even ask). If you’re preparing a written birth plan, add that in as one of the final steps before you head home. If you’re planning on a home birth, you’ll need to contact your state’s vital records office to request the birth certificate, and a local Social Security office to get a SSN and card.
Adjust Your Budget — Your new bundle of joy is going to add a whole lot of new expenses to your household budget. From diapers to child care, there are countless expenses coming your way. Spend some time before the baby’s birth going over your budget categories and deciding where you can cut back or what you can cut out to free up funds. Going forward, revisit your budget every few months and reallocate money to different categories as your baby’s needs change.
Add the Baby to Your Health Insurance — In all the excitement of the birth and adjusting to life with a little one, this detail is all too easy to overlook. But your baby is now a dependent and needs to be added to your policy to be covered. You generally have at least 30 and up to 60 days to get it done, but do it right away to get the ball rolling and cross one more thing off your long to-do list.
Prepare a Will — No one likes to think about this during an otherwise joyful time, but should the unthinkable happen, you want to make sure your plans are clear. Designating a guardian for your child and ensuring they will be taken care of in your absence is one of the most loving things you can do.
Get Serious About Saving — Maybe you’re already a dedicated saver. Or maybe you’ve been waiting for “someday” to start saving for the future. For expectant parents, that someday is now. You’ll want to allocate your savings into three areas: emergencies, education and retirement. If your current budget only allows for saving in one of those areas, start by establishing and regularly funding an emergency savings account. The goal is to save enough to cover 3-6 months of living expenses. It may sound overwhelming, but when you contribute to it regularly and leave that money alone, it will grow much faster than you think.