Bringing your new baby home can be an exciting and busy time for families. Check out the tips below for financial steps to follow after the baby is born.
Be sure to also check out the Financial Steps to Take Before Baby.
Get a Social Security Number
Once you’ve picked the baby’s name, apply for a social security number. This number allows you to claim your new baby as a dependent on your taxes and qualify for various tax benefits.
Having a social security number also allows you to open savings accounts for your child.
Add Your Baby to Your Health Insurance
Be sure to check with your health insurance provider to find out the rules and details you need to follow to add your new baby to your health insurance. If you wait too long and miss the deadline, you may have to wait until open enrollment to add your baby.
Set up a Will or Update Your Will
If you don’t have a will, now is the time to get one set up. You can use an online program, follow a book, or consult an expert. You may also want to check with your employer to see if they offer discounts or have a partnership with a company (maybe through an employee assistance program) that can assist you in writing your will.
In the will, you’ll want to designate a guardian for your child. This protects your child in case something happens to both parents. If you don’t designate a guardian, then the state will make the decision for you. Each state has its own guardianship rules and priority lists (the order in which guardianship is granted).
A will goes beyond just appointing a guardian for your children. It is also a tool to designate who will inherit certain assets and property if something happens. There are other assets that have separate beneficiary designations that you’ll want to update as well.
Update any Beneficiary Documents
With your will, review all of your beneficiary designations to ensure they match up with how you want your assets divided. These include your life insurance, retirement accounts and other accounts.
While you may have your spouse or partner designated as the primary beneficiary, you may want to add your new baby as the secondary beneficiary on these documents.
Consider Saving for your Child’s Future
While it may be tempting to begin saving for your child’s education, you need to make sure you are contributing and maxing out on your retirement savings first. You also want to make sure you have a healthy emergency fund of between 3-6 months of expenses (closer to six now that you have a family).
If you have both of those started and you have room in your budget, begin setting aside money for your child’s education or future. Consider meeting withIt ma a financial advisor to discuss special education savings accounts.
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