Early Money Moves to Make After Having a Child

My wife and I recently welcomed our second child into the world. A new addition to the family is always a blessing and, a bit tiring, of course. Amidst all the excitement and fatigue, I immediately went to work on my checklist of administrative and money moves to make during parental leave.

Below are some of the actions I will be, or have already taken. Hopefully, they provide some things to consider for aspiring or soon-to-be parents.

Key Actions for New Parents

• Establishing a 529 plan. We reside in Florida, and I wrote a detailed article comparing Florida Prepaid with the traditional 529 savings plan several months back. While you may not be a Florida resident, it may provide some important insight to you as you evaluate college savings options.

• Guardianship & estate documents. We now consider our family complete, and with that, it seems to be an appropriate time to work on guardianship and estate documentation. There is no greater concern to me at this stage of life, than the idea of a court deciding who would raise our kids in the event of untimely parental death. I consider this a must-do for all parents, and I will be looking for an attorney shortly. While we are doing this, it’s also important to dictate how our assets should be managed. It’s never too early to do this!

• Adding the child to health insurance. This likely goes without saying, but do not forget to add your child to your health insurance! Time is of the essence here, and I already added our newborn to our policy. There is a short window of time after a qualifying event such as the birth of a child to add them to insurance. Don’t miss it!

• Childcare. Ideally, you have a childcare plan well in advance of your child being born. As soon as we found out my wife was pregnant with our first, we went to work on our plan.

• Investment accounts. If you find additional room in your budget after accounting for childcare and college savings, you can open an investment account for your minor. There are a few different types of accounts and beware of any tax implications that may fall on you as parents.

Enjoy this exciting time! I know we will.