Having a baby changes everything in your life. Not only are you facing a new lifestyle, but you need to make some financial changes as well.
Start with looking at your budget. While little ones don't take up that much room, preparing for their arrival can take some money. Your new budget should include food, diapers, baby clothes and health insurance costs. Then consider all of the one-time expenses that will occur before and after the baby arrives, such as strollers, car seats and baby monitors. You will be surprise at how fast the costs can add up.
Make sure you apply for a Social Security Number for your child. You will need it in order to take advantage of the tax benefits available to parents. You can apply when the baby is born. The easiest way is to apply at the hospital. Simply tell the hospital representative that you would like to apply for a Social Security Number for your baby. You will need your and your husband's Social Security Numbers. Your will receive your baby's card in a few weeks.
Make sure you protect your child's social security number and card. Identity theft is an increasing crime in this country. Don't give it out without good cause, such as to the IRS or for a savings account.
You may find that you will need additional insurance coverage, especially when it comes to life insurance. Good coverage will give your child and spouse the funds to continue in a consistent way after your passing. Select the amount of coverage that will help your family meet living expenses, pay the mortgage and send your children to college.
Young parents are more likely to be disabled than killed in an accident. It is important to prepare for this by having disability insurance. This will replace a portion of your income so you can continue meeting your financial obligations until you are able to work again.
If you don't have a will, you need one. A will is the perfect place to name the guardian of your child in the case of both parents passing away. Without one, the state determines who raises your child. You can also establish what parts of your estate go where and to whom.
Once the baby has arrived, have it added to your health insurance as soon as possible. This will help avoid any mixups. Call in advance to see what you will need to do. You should also update your income tax withholding to reflect an additional dependent. This will give you a little more money in each paycheck, which you can spend on those endless packages of diapers.
Having a child is a good time to look at your finances and your goals. It is the perfect time for planning for the future.
Martin Lukac represents RateTake Refinance Rates marketplace. RateTake matches consumers with multiple lenders offering low rates. Got too much credit debt? Get Debt Help and you'd be surprised what we can do together.
