5 Things Every New Parent Must Do.

Protect your baby’s future by taking these legal & financial steps.
Stroller? Check.  Car Seat?  Check.  You have all the gear to take care of your bundle of joy now, but have you thought ahead to the future?  As a new parent, I know it’s challenging just to get through the day and manage to squeeze in a shower.  It’s easy to forget about your child’s long-term needs.  Being a responsible parent means you need to consider all of your child’s needs, not just the ones right in front of you.  Follow these 5 important steps to make sure your little one will always be taken care of, no matter what happens.

1 / Get your child a Social Security Card
The quickest & easiest way to take care of this is at the hospital.  When you fill out the form for your child’s birth certificate, check the box indicating you want a Social Security card for your baby.  This card is needed to obtain medical insurance and to open up a bank account.  Take care of it right away.  If you wait till your child is 1, you will need to apply at the Social Security office & provide documentation of your child’s age, identity, and citizenship.  This process can take up to 12 weeks.

2 / Write a will
Did you know that approximately 70% of families with children under the age of 18 do not have a will?  That’s crazy…this is the single most important document for ensuring that your wishes for your child’s care are honored in the event of your untimely death.  Talk to a lawyer or visit LegalZoom.com or BuildAWill.com

3 / Buy life insurance
Life insurance isn’t for the people who die; it’s for the loved ones you leave behind.  Don’t you want to make sure even if you’re not around, your family has enough income to cover the cost of diapers, diplomas, and everything in between?  And don’t count on the life insurance your employer provides to be there when you need it.  Make sure you buy your own policy.  Contrary to what you might think, its sometimes cheaper – and definitely more advantageous – to get your own individual coverage.  That’s because group plans cover plenty of individuals who are older or in poorer health than you, which bumps up the premium each person pays.  Also, you will not be covered it you switch jobs or are let go.

4 / Purchase disability insurance
Now, you might be reading this and saying, “I don’t want to be insurance poor.”  But really, between the ages of 35 & 65, you have a one in three chance of having a disability lasting more than 90 days.  Please don’t think that just because you sit behind a desk in a cozy chair that you’re not at risk…it’s not just about accidents on the job.  What if you get breast cancer or your husband hurts his back wrestling with the kids?  Who’s going to pay for groceries?  About 46% of all home mortgage foreclosures are caused by the disability of a family’s breadwinner.

5 / Set up an education savings fund
The estimated cost of a four-year public college 18 years from now is about $150,000!  Crazy isn’t it!  A private education is at least double that – and don’t forget all the expenses that pile up from kindergarten through high school.  Luckily, now there are a lot more options to help you save for education costs than there were just a decade ago.  There are state-sponsored college savings plans, known as 529 plans.  These allow you to sock away as much as $250,000 over the life of the account to pay for your child’s college education.  You don’t pay taxes on any interest your money earns, as long as the money is used for qualified educational expenses.  Now you might be wondering how am I going to save $250,000…your family & friends can contribute into these funds as well!

Another option is a Coverdell Education Savings Account, which allows you to put away up to $2,000 a year.  With a Coverdell, you don’t pay taxes on earnings or on qualified withdrawals.  While 529’s can only be used for costs related to higher education, a Coverdell account can be used to pay for educational expenses from kindergarten on, including private-school tuition, books, even Internet access & tutoring!

2 Responses to “5 Things Every New Parent Must Do.”

  1. Mr WordPress says:

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  2. Matt says:

    great post, very helpful.

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