Top 10 to-do's for new parents

When you have a newborn in the house, who wants to spend their limited non-baby attention span on financial planning? 

Answer: Nobody. Unless you’re a financial-planning geek, in which case you’ve got this wrapped up already. Go ahead and watch Better Call Saul and sleep soundly tonight. Well, maybe not soundly — you’ve got that newborn.

For everyone else, it’s important to realize that your finances will change now that you have a child. (Sounds obvious, but new parents sometimes miss the obvious.) Maybe your income is slated to remain the same, but you’ll be adding child-care costs. Maybe one spouse is taking a break from work — keeping down child-care bills but reducing income. 

Whatever your child-care situation, you’ll also have costs related to diapering, clothing, feeding, health care and toys, as well as one-time costs including strollers, car seats, a crib and so on. And that doesn’t even cover saving for college ( 

A excellent resource for getting a grip on how much your budget will be affected is BabyCenter’s First-Year Baby Costs Calculator ( A rough estimate shows you’re probably looking at about $10,000 in costs that first year and a quarter of a million dollars to raise the kid. 

Most of us would plan pretty carefully for an expense that size, yet most new parents go relatively unprepared into that good night.

But don’t worry if you didn’t get to any of these before your joyous noisemaker arrived — or even before her first few birthdays. It’s always a good time to reassess your family’s financial health.

1. Make a will. Name a guardian, and make an estate plan if you need to. A will is super-important even if you think you don’t have enough assets to warrant one.

2. Get life insurance. For most consumers, term life insurance is the best option, but do some research to figure out whether term or whole is better for your family. No one wants to think about dying, but suck it up: You don’t want to leave your family in a lurch.

3. Get disability insurance. If thinking about death is hard, consider this sad fact — or happy one, depending on your point of view: During your working years you’re more likely to become disabled than to die. So get income-replacement insurance (often available through employers).

4. Reassess your health-care plan. Not all plans are created equal. If you have two working parents, compare plans to see which is more affordable — and best — for dependent or family coverage. You might be surprised what you find.

5. Sign up for a dependent-care account. If you (or your spouse) have this option through work, you can put up to $5,000 per year (pre-tax) toward qualified child-care expenses such as daycare and before- or after-school care. And that can save you a bundle in taxes.

6. Assess your tax implications. There are lots of benefits available to parents, and it may be that a dependent-care credit on your taxes is more valuable than that before-tax dependent-care spending account. If you use a tax preparer, he or she can help you figure out which choice is right for you. If you’re a do-it-yourselfer when it comes to taxes, try running the numbers both ways with an online calculator: Many will let you run the numbers for free, even if you don’t end up filing through their service. 

7. Save for retirement. Most new parents should save for retirement before saving for college. (Roth IRAs can be used for retirement and college.)

8. Set up a savings account. You could also call this your emergency-spending account. I know, I know: You’re saving for retirement, you’re paying an arm and a leg for child care, can you really sock more away? Answer: Sock it. You really do want to have six months of savings just in case.

9. Save for college. But first be sure to have emergency savings set aside, plus a healthy retirement-savings plan.

10. Get out. Make a line item in your budget for regular date nights. You’re going to need them for your sanity. And sitting up bleary-eyed in bed, streaming Hulu on the iPad is not a date. This special adult time is a good opportunity to discuss many of the items on this list — though you’re more likely to recount stories of cute things your baby did.