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5 Must-Do Money Moves When a Baby Arrives

You’ve recently had a child, congratulations!  What an exciting time for you and your family.  You are probably swamped with visitors wanting to check out your “little one.”  Everything may seem like a whirlwind for you right now with your changing family dynamic.  The following are a few things that should be considered when you’ve had a new addition to your family:

Set a Budget, Stick to it!

Kids are expensive!  You will have many doctor visits, diaper purchases, and don’t even act like you aren’t planning on spoiling that child-- you will!  So make sure that you are setting a budget that includes an amount set aside for baby-related expenses.

To Do: Life Insurance Needs Analysis

A sound financial plan will include a life insurance needs analysis.  This will help you to determine: A) How much life insurance does my family need to make sure you can survive an unexpected death B) Do I have the right type of life insurance, and C) is my insurance cost-effective?  You may be able to get an additional amount of “supplemental” life insurance through your employer for a reasonable price  without any medical underwriting.

Start Saving for College Expenses

This depends on the family.  Some folks don’t plan on paying for any college expenses for their children, others want to cover the whole cost.  If you do want to help with this expense, start as soon as possible!  With 18 or so years until your child will attend a higher ed institution, let the tax deferral of a 529 plan work in your favor.  Remember, even the growth of a 529 account is tax-free if it is used for a qualified education expense.  And there are often some great tax credit/deduction opportunities, too! (20% state tax CREDIT in Indiana on up to $5k in contributions per year)

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Update your Estate Planning

Have a will in place?  Time to amend it!  Don't have one yet?  Get one!  Your will needs to be updated as your family dynamic evolves.  Also, you must update your beneficiary designations on all of your investment accounts and insurance policies.  If you don’t already know, beneficiary designations trump a will!  If you don’t have an estate plan, the state has one for you.  And do you want a chunk of your hard-earned assets going to the state as payment for them to decide how to dole out your money?  I sure don’t.

 Be a Little Selfish

Yes, be a little selfish!  Don’t neglect your retirement savings because you now have a child.  It may seem daunting and retirement is still far away for you, but it’s important to keep investing in your future as well as your child’s.  Ever heard of the new retirement loans for folks who aren’t quite ready for retirement when it comes?  No?  That’s because there isn’t one.  It’s important to keep working on growing your nest egg even as your family nest grows.
Congratulations on your new bundle of joy!  It’s such a beautiful miracle.  I hope you find these 5 tips useful.  I enjoyed writing it and sharing pictures of my nephew, Henry (isn't he cute!?).  If you don’t use these tips, you might end up feeling like this…



Nick Vail, CRPC


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