6 Financial To-Do's for New Parents

Having a new baby is a much-anticipated event. While growing a larger family brings added joy and love to your household, it can also wreak havoc on your finances if you don't properly plan. Being prepared financially can go a long way toward reducing stress and allowing you to enjoy the new life that you are bringing into the world. To help you get started, below are six financial to-do's that new parents should consider. 

1. Figure Out Your Health Insurance Coverages and Processes

Even if you have good health insurance coverage, the bill for having a baby can be an expensive one to pay. When you find out you are expecting, contact your insurance company and get a basic framework for what portions of the physician and hospital costs are covered and which ones you will need to pay out-of-pocket. Even though the determined amount is only a ballpark figure, it can help you set a goal to save so that you don't get underwater with medical bills after your new bundle of joy arrives. If you have a health savings account, be sure to adjust it so that you will have as much as possible towards your medical costs while enjoying the tax break on your paycheck. When contacting your health insurance company, it may also be a good time to determine how to add your new little one to your policy. 

2. Create a Baby Budget

Even if you have a fairly well-laid-out budget, you will need to make changes to account for the additional cost of your newborn. If you plan on making payments for medical expenses, you will need to include that in your new budget, as well as diapers, feeding supplies, clothing, and doctor visit costs. You may also want to consider starting your budget when you find out you are expecting and including a section where you work in the expenses of high-cost baby items such as a stroller or crib. You must also estimate your childcare expenses if you plan to return to work. 

3. Make Any Necessary Insurance Adjustments

If you have a life insurance policy, you will probably need to increase the value to have enough to care for your child in the event something unexpected occurs. If you don't have a policy, now is the time to get one to protect your family if you are no longer around. It is also a good time to address any other policies, such as disability insurance, checking all the amounts to ensure that you and your new family are fully covered.

4. Make a Financial Plan 

Find out what your employer covers for maternity or paternity leave, and make sure to include savings in your budget so that you will have the amount of lost income during this time saved up. This will help you alleviate any strain on your budget after your little one arrives. If you don't plan to return to work or work only part-time after your leave, you will need to create an adjusted budget and make other adjustments to bridge the gap that your loss of income will have. 

5. Start an Education Fund

While it may seem like college is a long way away, it can sneak up on you financially. College tuition is one of the largest expenses that families will face when raising their child, and all too often, savings fall short because many parents don't get started until later on in life. Starting early will help your money grow faster, reducing the amount you will have to put into the account. 

6. Start or Increase Your Emergency Fund

It is always critical to have an emergency fund. This way, if you suffer a loss in income, an expensive event, or an unexpected major repair, you will have the funds to cover it without having to fall behind in bills or borrow against your assets. If you currently have an emergency fund, you will probably want to increase it as your financial needs will be greater with a new baby. 

Get your financial house in order before your little one arrives so you can relax and enjoy your new addition without stressing over your monthly bills. 

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