6 Financial Steps to Take Before Having a Baby

By Rosa Campa Hearne, CRPC® CIMA® , Senior Vice President, Wealth Management Advisor at Merrill Lynch On Aug 23, 2017

Preparing for parenthood isn’t just about tiny clothes, heartwarming ultrasound photos and baby-proofing. While adding a child can bring joy and excitement – it can also bring a variety of financial responsibilities. With a baby on the way, there are a host of questions and decisions for parents to consider to make sure they are fiscally prepared to grow their family, so tackling certain tasks now is a smart idea.

• Review your health insurance: While everything is still relatively calm, add your new addition to your health care plan and review your existing policy now. You can either work through your employer or contact your insurance provider directly.
• Register early: Set up a registry early so family and friends who are eager for your little one to arrive can help prepare for the baby. From big ticket items to car seats and strollers to smaller items like diapers and pacifiers, contributions from your friends and family can help cut expenses.
• Set up a baby account: Consider opening a separate savings account where you can start putting money away for your little one. Setting up automatic transfers after each paycheck will give you an even bigger boost!
• Create a (new) budget: With a new member added to your family, your normal expenses are sure to change. Talk to your spouse about how to adjust your budget in order to pay for new expenses that having a baby will bring.
• Start an education fund: Invest in a 529 college savings plan. This investment tool compounds interest and is designated for education expenses down the road – the sooner you start saving the better!
• Purchase life insurance and create a will: Ensure you loved ones are financially safeguarded by investing in life insurance and putting a will in place. If you already have a plan, now is a good time to review your policies and update beneficiaries, if needed.

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