Congratulations! Becoming a new parent is the biggest hurdle you will conquer. If baby is on the way, you are busy prepping, planning, and imagining your new life. If baby is already here, you are likely reading this article in the middle of a sleepless night. You may be wondering, “what did I used to do with all my free time?”
Although nothing can really prepare you for the challenges, emotions, and joys that comes with being a new parent, there are ways to get financially organized to give you peace of mind and ease those sleepless nights.
We have prepared two lists to provide busy parents with some financial “tech support.” One checklist is for those who are still waiting to embark on the adventure of parenthood, and one for those who are knee deep in caring for a newborn.
Waiting for the Stork to Arrive
- Triple Check the Fine Print of your Health Plan Coverage
Dealing with health insurance couldn’t be any trickier than it is right now. Moms – take a closer look at your policy and read the fine print regarding deductibles, adding baby onto your insurance, copays for each day in the hospital and so much more. There is good news though – most health insurances will cover the cost of a breast pump. If you are not sure if you need one – get one anyway. Find out what other freebies are available and get them. Learn what’s covered for you during your pregnancy and for your newborn baby.
- Limit the Purchase of Baby Supplies
Take advantage of baby showers and generous gifts from family and friends. Buy only the necessities and set yourself up with easy online ordering for future necessities as they arise.
- Save for Unpaid Leave
Will you be taking unpaid maternity leave? Are you self-employed or plan to take an extended maternity leave from work? Make sure you prepare yourself mentally and financially with enough money in the bank to cover for the months that you fall short. Plan to spend your funds on medical bills, diapers, formula, child care, and other new expenses.
- Purchase Life Insurance
Let’s face it, the days of thinking about yourself are over. Now you have to plan financially for your little humans. In the event of your sudden death, how would your family survive? Life insurance is the answer for many. Life insurance helps with the cost of raising your child in case something happens to you or your spouse. It is crucial that both spouses purchase life insurance policies because regardless of who works and who cares for the children, both roles cannot exist without the help of the other.
- Get the Estate Planning Basics
Start with the 3 crucial documents that EVERYONE needs:
- Durable Power of Attorney – allows you to select a person (the “agent”) to “step into your shoes” if you become mentally or physically incapacitated. The agent will be able to make legal and financial decisions and conduct transactions on your behalf. The Durable Power of Attorney document ends when a person passes away. Note that if you created a Power of Attorney prior to October of 2011, it is time to update it as the laws have changed.
- Health Care Surrogate – also known as a Health Care Proxy, this document allows you to name someone (the “agent”) that will make health care decisions for you in case you are unable to make them yourself. Such decisions include consenting to medical procedures, seeking a second opinion, obtaining medical records, or transferring you to a different medical facility. Note that if you are not legally married but plan to have your partner in the delivery room with you, this document is a must, otherwise your partner may not have any say in healthcare decisions that affect you during delivery.
- Living Will – This is often part of the Health Care Surrogate, but can come as a stand alone document as well. Living Wills allow you to state your wishes about your end-of-life medical care. This allows your health care surrogate (person you nominate to make medical decisions for you) to best carry out your health care wishes in regards to life sustaining procedures.
After the Stork Brings Baby
- Meet with an Estate Planning Attorney
The best way to educate yourself on all the “what ifs” is to meet with an experienced estate planning attorney. An attorney will recommend that anyone with assets and minor children have an estate plan. This will include naming guardians for minor children in case of your death, a durable power of attorney, and a health care surrogate. If you own your home, they will likely recommend a Revocable Trust, also known as a Living Trust.
- Check into Prepaid College Plans
The cost of education is growing every year. Although it is human nature to put off major projects while you have small children, that may lead to bigger money problems down the line. It is always a good idea to meet with a Financial Planner so you know your options regarding college savings plans, UTMA accounts, and IRA accounts. There are such a variety of options out there, that almost any budget can allow for some long-term investment strategies that will benefit your children or their educational goals.
- Life Insurance for Baby
Sounds crazy but purchasing life insurance for your little one may be the best investment you make. Other than the obvious benefit of your child having a policy and never having to worry about purchasing it themselves, many policies allow them to qualify for increased amounts of insurance later in life, no matter what future health issues he or she faces. Whole life insurance can also build a cash value to help fund your child’s future investments such as college expenses, first home purchase, etc.
Being a parent is the most important job you will ever have. We understand the love you have for your children and will help protect your family as well as your peace of mind. Contact OC Estate & Elder Law at (954) 251-0332 or firstname.lastname@example.org to receive a personalized consultation regarding estate planning and all your financial options as a new parent.