We were recently blessed to welcome our second daughter, Elizabeth. This being our second, I think we are somewhat better prepared for how our lives would immediately change. These first few months are filled with joy and excitement (as well as exhaustion coupled with just trying to figure out what we are doing). While I have no advice on how to get your newborn to sleep on schedule, I can give you some advice on some financial matters all new parents need to address (and soon for some of these):
1) Add your new baby to your health insurance. Having a child qualifies as a life event, which allows you to make changes to your insurance plan outside of open enrollment. Most plans only give you 30 days from their birthday to add them to your plan. You will typically need a certification of birth from the hospital or a birth certificate.
2) Review current life insurance coverage and determine if it meets the needs of your growing family. If you lost one spouse’s income, would it be hard to continue your current lifestyle? Be honest with yourself – if you aren’t currently saving one of your incomes, you likely need more coverage. We generally always recommend term insurance for new parents, which can be quite inexpensive.
3) Update your will, beneficiaries, and withholdings. Your estate planning documents need to be updated to include your new baby. This will also involve updating any beneficiaries on current insurance policies and retirement plans. You also may want to consult your CPA to see if you should change your withholding elections as you likely will qualify for the newly updated $2,000 child tax credit (per child).
4) It is never too early to start thinking about college saving. Estimates range about what college will cost for a child born this year, but expect public, in-state college to cost $150,000 to $200,000 by the time your newborn reaches 18. I believe 529 plans are the best way to save, and starting early means you will need to save a lot less (and could help your child avoid burdensome loans later in life).
I can’t guarantee following these steps will help your child sleep through the night, but you should at least rest easier knowing your family’s financial future is on a solid foundation. Stay tuned for more tips on how to build the financial future for your family that they deserve. I would love to discuss my approach to each of the above or answer any questions you have!
Chris Blackmon can be reached at 770-261-5386 or [email protected]
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