Congratulations on your new arrival! Our comprehensive checklist for new parents covers the essential financial and legal steps that will secure your families future, from life insurance to your first will
Becoming a parent is one of life’s most joyful and transformative experiences. Amid the sleepless nights and countless diaper changes your world suddenly revolves around this tiny new person. While you're stocking up on onesie's and assembling cribs its also the most critical time to build a secure foundation for your child’s future.
The checklist breaks down the essential financial and non-financial steps every new parents should take to ensure their family is protected.
These are the administrative tasks to get out of the way early on.
- Get a social security number: This is priority one. You'll need it to add your child to your health insurance and for future tax benefits. Its often done at the hospital before discharge.
- Add Baby to Health insurance: Contact your employer or insurance provider immediately. you’ll typically have 30-60 days from birth to do this as a “qualifying event”
- Update Your Budget: Account for new expenses (diapers, formula, childcare) potential changes in income (parental leave, reduced hours)
- Legally Document Your Child's Name: Ensure the birth certificate is accurately completed and filed
The Financial Foundation (First Few Months)
This is where you build the core of your child’s financial security
- Review Life and Disability Insurance: if something happens to you or your partner, your child must be provided for. Ask yourself: is our current coverage enough to pay off debts, cover future living expenses and fund college? Term life insurance is often an affordable solution for young families
- Draft or Update your will: This is a non-negotiable. A Will allows you to:
- Name a Guardian: this is the most important decision. Who will raise your child if you cant? Discuss it with them beforehand
- Establish a Trust: you can dictate how and when your assets are distributed to your child ensuring they are used responsibly.
- Start an Emergency Fund: Aim for 3-6 Months of living expenses. Parenthood comes with unexpected costs. A robust emergency fund is your first line of defense.
- Begin Saving for Education: its never too early. A 529 College Savings Plan offers tax-advantaged growth and withdrawals for qualified expenses. Even a small automatic monthly contribution can grow significantly over 18 years.
The Non-Financial Essentials
Money is a tool but these elements are just as crucial for your child’s well being.
- Create a Parenting Plan: Discuss values, Education, religion, and discipline with your partner. Being on the same page creates a stable and harmonious environment.
- Prioritize Your Parenting: Schedule time for each other. A strong relationship is the bedrock of a happy family
- Build your Support Network: Identify Family, Friends, and other parents you can rely on for help, advice, or just a much needed break.
- Designate Power of Attorney and Healthcare Directives: These documents allow someone you trust to make financial and medical decisions for you if you become incapacitated, ensuring your childs care continues uninterrupted.
The Long-Term Plan (First Year and Beyond)
- Revisit Your Budget Annually: Your financial needs will change as your child grows.
- Increase Savings Contributions: AS your income (hopefully) grows, incrementally increase your contributions to your emergency fund, retirement plans, and 529 Plans.
- Teach Financial Literacy Early: AS they use, use allowances and savings jars to teach them about money, savings, and giving.
The Bottom Line:
Becoming a parent is a powerful motivator to get your financial house in order. Tackling these steps might feel overwhelming, but you don’t have to do it alone.
SWAN Wealth Management Group is here to help. We can guide you through selecting the right insurance coverage, setting up a college savings plan, and integrating these new priorities into your overall financial strategy.