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Question:


What are some general financial things my wife and I should have in place prior to starting a family?
-FutureParents


Answer:


One of the more obvious and important pieces of financial and legal planning for prospective parents is making a will. That can be done before their first child is born, but many other steps can or must be left until after the big event. For instance, parents should apply for a Social Security number for their baby as soon as possible in order to apply for tax deductions for which they’ll be eligible, as well as potential credits. They should also contact their employers to adjust tax withholding and, if applicable, make sure that the baby is covered on their company’s health insurance plan. They also should ensure that they have life insurance and that the coverage adequately reflects their new family circumstances, and they should change the next-of-kin information in 401(k) or other retirement plans. One other item: Having a child is expensive, of course, but financial planners nevertheless advise new parents to start thinking about saving for college as soon as possible by starting a tax-favored 529 plan.

-Conrad de Aenlle



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