Checklist of things to do when a child arrives
Life changes when you have a child. Get your finances ready with this having a child checklist.
- Get your child a Social Security number at the hospital or at your local SSA office.
- Update your will and name a guardian. How do you want your stuff divided up and who should take care of your minor children? Lawyers can do simple wills for $300 – $500. Do it yourself for under $100 here:
- Review your designations of beneficiaries.
- Review your life insurance coverage so it covers your debts, college expenses, and loss of your income. Many people say the simple rule is 8-10 times your income. The good news is that it is relatively cheap for young adults, either thru your employer or basic “term” life insurance. “Whole” life insurance cost more and is more complicated, but returns savings in the future. Get it for a fixed term, perhaps long enough to pay off the mortgage or get the children thru college.
- http://money.cnn.com/magazines/moneymag/money101/lesson20/index.htm – Learn more about life insurance.
- http://www.lifehappens.org/life-insurance-needs-calculator/ – Life insurance needs calculator.
- http://www.insure.com/ – Get quotes from many life insurance companies without the hassle of pushy sales people.
- https://termlifeconversion.com/simple-process-selecting-right-insurance-policy/ – Step by step guide.
- Add a deduction to your tax withholdings so less tax is withheld from your paycheck.
- Review your health benefits coverage for a good family plan. Children need different benefits than adults.
- Don’t delay in saving for college. Even $50-$100 per month adds up quickly if you start soon enough. Waiting until later means saving more and getting less. The miracle of compound interest means providing enough time for the growth of your savings to build more savings year after year. Saving early is more important than how much you save.
- When you start paying for day care, check to see if your employer offers a flexible spending account for day care. If yes, you can get a tax break from the money you divert to this account and use to pay for day care.
- Start an investment account when born and contribute to it each birthday. Example: Start with $1000 and contribute $100 on each birthday. At age 22, they will have almost $10,000 at 7% compounded annually to help pay off student loans, buy a decent used car, have a wedding, or live on their own while finding themselves or a job.
Using your child checklist will improve your personal financial future.