Having a baby is one of the most exciting times in life — but with new adventures comes new challenges. For many soon to be parents, the months leading up to the baby’s birth are very hectic. There is so much to do but also so much to learn. Where do you even start?
To help you get off to a good start, I wanted to create a list of things for you to do/think about doing both before and after birth.
Take A Look At Your Health Insurance
Depending on how the birth goes, depends on how much it could cost. Some go very smoothly, others are a little more complex and expensive. Make sure you enroll into a solid health insurance plan during open enrollment the year before you have the baby because pregnancy does not count for special enrollment.
Understand Your Health Insurance Costs And Save For The Deductible
You can easily save ahead of time so you are prepared to pay whatever the total cost will be of the delivery. If it says $4,000 is the cost, well then save monthly to ensure you have at least that much available when the time comes. There is simply no reason to not do this.
You could also have copays or coinsurance towards things like medications, physician services or radiology so saving some extra may not be a bad idea. There’s no need to go into debt for a delivery when you could plan ahead of time.
Get Life Insurance
If for some reason you do not have life insurance yet, you definitely need to get some. Once there are people who are reliant on your income, life insurance becomes a need not a want.
You want to take care of your family in case something happens to you! Check out this post if you want to learn more about life insurance. Typically, getting term life insurance will make the most sense for young parents. This will get you the most benefit for the least cost. Please, do not push this off. Get covered, it is not very expensive at all. I would say with life insurance, the benefits (knowing your family is taken care of in the event of a premature death) far surpass the monthly costs .
Update Your Estate Plan
For most millennials, I would say to go create your estate plan for the first time. But for some of you who may have it done, you will need to go update your estate plan now that you have a child coming. Trust and Will or Helios are great online places to get your estate planning documents done for an affordable price.
You want to do this for many reasons — one being that giving birth may be routine but it can also be dangerous, so it’s better to be safe than sorry. Another reason is to help ensure
that if anything happens to you, the parents, in the future, the court will know who will take ownership of your children.
Next, you will also want to ensure that your power of attorney is up to date.
Lastly, you will want to go and make sure all of your beneficiaries are up to date. For those that don’t know, this means who the money will go to if something were to happen. You put beneficiaries on your investment statements, life insurance, etc..
Note: You may want to consult an attorney and get a trust set up so proceeds can be put in the trust for your young kids. Otherwise, there could be probate and many headaches along the way.
Get A Social Security Number and Birth Certificate
Once you give birth, the attendant will ask you for a bunch of information to list on the baby’s birth certificate. They will also ask you if you want to apply for a social security number, which you definitely do. If for some reason you choose no to do this, you can go apply at your local Social Security Office, but doing it at the hospital will most likely be easier. But make sure you go and get the birth certificate. Different states have them at different places. AYou will want the physical copy.
Add Your Baby To Your Health Insurance Plan
This is pretty self explanatory, but babies have to go to the doctor often so getting them on your health insurance plan right away just makes sense. I would say this is the biggest thing that needs to get done in the first month! Having a baby does count for special enrollment, so you will be able to add them whenever throughout the year, but it typically has to be within 30-60 days of the birth.
Start Savings/Investment Accounts For Your Child
If you want to save for college or just their future in general, you may want to consider setting up a 529 plan, UTMA account, or just a regular savings account for them. There is no requirement to fund them on a regular basis, but you might as well set them up and contribute as you can. I will say that investing for their future will be better than just saving for it in cash, but you can pick what is best for you and your family.
Alert Your CPA
Having a child has a few tax implications, especially now with the new child care tax credits (you can read about them here) so you want to alert your CPA that you had a baby before they file your taxes. If you do them yourself, do some research to ensure you maximize the credits at your disposal.
Consider participating in a dependent care FSA
An FSA is a dependent care flexible spending account. This is a pre-tax account that is sponsored by an employer and can be used for qualifying child care expenses. The maximum contribution for 2020 is $5,500 a year. You can use these funds for eligible child care expenses like daycare. But make sure you only contribute how much you will use, because it’s a use it or lose it in that year type of account. I will say that most parents do spend over $5,500 a year on childcare, especially if both are working spouses.
If you are able to check all of these off within the first month of having your baby, you will be in a really great position. If you need help preparing for the baby, their future, and your future, feel free to reach out. I would love to help you plan for this.