Checklist for the Arrival of a Baby

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
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fulltilt
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Checklist for the Arrival of a Baby

Post by fulltilt »

My wife just gave birth to our first child, a daughter, and i sure there are tons of things that i have to do from a financial perspective. Does anyone have any links or ideas for a good checklist of things that i need to do? Any caveats i should be aware of in terms of insurance or anything?
Walk a single path, becoming neither cocky with victory nor broken with defeat, without forgetting caution when all is quiet or becoming frightened when danger threatens. -- Jigoro Kano
dandan14
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Re: Checklist for the Arrival of a Baby

Post by dandan14 »

Good question. Believe me -- it gets less scary.

Here are some things off the top of my head.

Continue to live beneath your means. Now more than ever, money will seem to vanish. Get ready for a LOT of extra expenses. However, try to resist the temptation to buy every little thing that companies market to new parents. You don't REALLY need a bottle warmer, a diaper genie, etc.

You now have a little person who depends on you (and your income). You should get term life insurance on your life and likely your wife's life as well (since you'd either quit your job or have to hire help). Look at term life with a term of between 20-30 years (which gets this and future kids raised and capable of supporting themselves.) You can compare apples to apples at term4sale.com.

Invest in a good camera. You'll want to capture these moments. And make sure to use keep at least one backup copy of your digital pictures either in the cloud or at a different location.

You can setup a 529 with your child as the beneficiary. Depending on your state of residence, you may get a deduction on your state income taxes and that money grows tax free if used for college. If this child doesn't go to college, you can easily change the beneficiary.
Sriracha
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Re: Checklist for the Arrival of a Baby

Post by Sriracha »

Congratulations, Fulltilt! That's awesome. (Sorry, can't help with the checklist.)
Don't reach for yield.
goodenoughinvestor
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Re: Checklist for the Arrival of a Baby

Post by goodenoughinvestor »

You and your wife should both have wills. (Congratulations!)
cherijoh
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Re: Checklist for the Arrival of a Baby

Post by cherijoh »

Do you have insurance through your or your wife's employer? You need to let HR and/or your health insurance provider know ASAP since this is one of the times you can modify your coverage outside of the open enrollment period.
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EternalOptimist
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Re: Checklist for the Arrival of a Baby

Post by EternalOptimist »

Three things...

1. Congratulations
2. Enjoy every moment
3. Get some sleep :wink:
"When nothing goes right....go left"
vveat
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Re: Checklist for the Arrival of a Baby

Post by vveat »

Will or living trust - look into both, not sure what is best for your circumstances
Term life insurance - you can use online calculator, I've heard 10x income as a rule of thumb
Open a 529 for her, no need to start funding until you are ready, but we got some monetary gifts, esp from family, and directed it there
Health insurance and FSA at work usually have open period after birth
Look at your tax withholdings.

Don't worry too much and enjoy the experience. You only have a first kid once.
jon-nyc
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Re: Checklist for the Arrival of a Baby

Post by jon-nyc »

A will for sure, even if you have no assets, to establish who gets the kid if you both get hit by a bus. You and your spouse may think the answer is obvious, but that doesn't mean every surviving relative interested in custody would. You wouldn't want this to be contested.

If you have assets - a trust. You don't want a 9 year old inheriting lots of money. You don't want an 18 year old inheriting a lot of money. You don't want a 25 year old inheriting a lot of money. (what i mean is, you don't want them to have control over it at those ages)

Apply for a social security number, stat. You'll need it for filing taxes in the new year and establishing a 529.

Got child care sorted out? Is there still time to do a dependent care FSA with an employer for 2014? Note that to use that bennie the child care must be above board (no paying a nanny in cash under the table)

Get the 529 sorted - lots of info here about what state(s) to do it in. Basically, do your own state up to the limit of any tax break and put any overflow in one of the better plans (assuming your state isn't one of them)

Life insurance for you and the spouse. If one of you is non-working keep in mind the 'replacement cost' of his/her services is real $$.


Check the birth certificate for typos or erros. The hospital tagged my son as a girl on the form, and the birth certificate came to me that way. It was straightforward to fix right then, had I waited it would have been much more difficult. (we joked at the time it might be less hassle to give him a sex change)


If I think of anything else I'll repost.


Oh - and do this, even if you've already done it. Walk up to the baby, put your nose on his/her forehead, and inhale deeply. That new baby smell? Its awesome, and you'll never forget it, but it goes away quickly. :happy
jon-nyc
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Re: Checklist for the Arrival of a Baby

Post by jon-nyc »

Oh, add the kid to your health insurance, if it hasn't been done already. A new kid is a 'life event' that allows updates mid-cycle.
dandan14
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Re: Checklist for the Arrival of a Baby

Post by dandan14 »

Oh...and one more thing. Go ahead and order a few extra "certified" copies of her birth certificate. There are several times you need a certified copy -- like when taking baby on an airplane.
BlckhwkPlt
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Re: Checklist for the Arrival of a Baby

Post by BlckhwkPlt »

I would urge you to rethink a will versus a trust. Talk to an estate planning attorney on this. It was well worth the $3800 I spent to get everything locked up to where creditors, predators, etc. could not touch anything going to my daughter. It will vary state by state, but in Texas, with the attorney I used to create a trust - nothing will go to the IRS, nothing will go to predatory creditors or people and she will be taken care of for life. I also made it to where my spouse (if you read on here, he is absolutely horrible with money) cannot get to it as it will be a decent sized 7 figure sum. I have a friend who is independently wealthy listed as the executor who will manage this for my spouse and daughter. The backup to her - same deal.

Decide who gets the kid if you both happen to die. Fact of life is that it could happen. Be prepared for a decent 'discussion' if you all don't agree on this.

My daughter's education is paid for via military benefits, but you'll want to look into some sort of education plan for her.

Let other people buy her all the clothes they want or buy used. Don't have a receipt and she never wore it or outgrew it? Sell it to a consignment shop. They also buy used clothes.

Let yourself buy her things just don't go overboard :D That said, there are always sales somewhere on toys and kids things. It currently looks like Babies R' Us threw up in my house - after Christmas will be even worse.

Hopefully your wife can breastfeed. If not, all the major formula manufacturers have coupons somewhere at just about any given time.
bogleviewer
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Re: Checklist for the Arrival of a Baby

Post by bogleviewer »

How about getting maximum amount of ibonds? Or can a newborn not participate for some reason?
dlprop
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Re: Checklist for the Arrival of a Baby

Post by dlprop »

Hi, our baby is about a year old (who's counting?) and I wasn't able to find a good checklist. Here's what I've come up with so far (in no particular order):

1. Dependant care FSA--we max this out because we do daycare, but can be used for nannies/babysitters as well
2. Increase life insurance payout (we increased to 300K for each of us from the default 50K), costs me an additional $150/year
3. Do the social security/birth certificate paperwork at the hospital (and as someone mentioned, double check everything is correct)
4. Add kid to health insurance (this is a qualifying event where you can add a person -- though I believe this month is also open enrollment for most plans)
5. Put at least $500 in Health Care FSA, you should be able to roll this over if unused (2014 rules). Keep in mind that baby has 6 mandated baby visits in the first year and only one of those six visits is considered a preventative visit but the insurer.
6. Redo your wills, set up a trust, POA, health care proxy, name a guardians for your daughter (haha we still need to get this done, just spoke to a lawyer yesterday)
7. Not sure if your wife works, but my company's policy was only 6 weeks on short-term disability. If you work for a company with more than 70(?) workers in your state then you are entitled to 12 weeks FMLA (though not necessarily paid) in the year after your child is born. The time off does not need to be consecutive, so you could take time in the beginning and then later on if you need it. I think FMLA applies to dads as well, though I've only known one dad that actually used it.
8. We decided not to create a 529, but I spoke with a financial planner that has a 529 for their child and turns out they have the 529 in grandma's name.

And then just things that I thought were prudent (more unsolicited advice):
1. Don't create a Facebook account for your kid; especially not with their real birthday... and I don't use his real birthday on anything that's not official
2. Don't use baby's real name on anything that's not official
3. Someone mentioned on this forum to "Don't forget to stop and smell the roses." Best advice
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frugaltype
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Re: Checklist for the Arrival of a Baby

Post by frugaltype »

BlckhwkPlt wrote: Decide who gets the kid if you both happen to die. Fact of life is that it could happen. Be prepared for a decent 'discussion' if you all don't agree on this.
Have backups for the guardians. If they are close relatives or friends, it would be all too easy for all of you to be taken out at once in some accident.
Auream
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Re: Checklist for the Arrival of a Baby

Post by Auream »

I'm going to go against the grain of most of these posts and recommend you do NOT open a 529 account, unless you are already maxing out all available retirement accounts and HSA. This has been debated ad nauseam, but for the vast majority of people, saving money in a retirement account beats a 529. Also avoids being counted as an asset on FAFSA.

However, if you make so much that you won't get financial aid (and financial aid is offered at many schools for families making well over $100K/year), and your retirement accounts are already maxed out every year, then go ahead with the 529. Even better would be to open an account held by a grandparent (from a financial aid perspective).
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jskorup
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Re: Checklist for the Arrival of a Baby

Post by jskorup »

fulltilt wrote:My wife just gave birth to our first child, a daughter, and i sure there are tons of things that i have to do from a financial perspective. Does anyone have any links or ideas for a good checklist of things that i need to do? Any caveats i should be aware of in terms of insurance or anything?
A lot of this depends on your finances (obviously). My wife and I have a 15-month-old and she works only part-time for little money, so our income is almost totally based on my income. We have an extremely tight budget.

One piece of advice: Don't buy any clothes!

Everyone is going to be getting you clothes, plus, they are the cheapest thing to pick up used. This is a major expense for a lot of people which is easy to avoid.
"There are no solutions; only trade-offs." - Thomas Sowell
BlckhwkPlt
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Re: Checklist for the Arrival of a Baby

Post by BlckhwkPlt »

Trust me...don't YOU buy clothes...your wife is going to buy them anyways :D We cant help ourselves. Especially at 2AM feeding the baby while your spouse is snoring right next to you, rag in hand "ready" and waiting to catch any spitup. It's boring just sitting there.
Dandy
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Re: Checklist for the Arrival of a Baby

Post by Dandy »

Get the newborn's Social Security number.
Keep a bit more assets liquid - infants/babies are often more expensive that you think. diapers, wipes,formula, bottles, MD/RX expense, non RX expenses, car seats (for each car), less time to cook/shop so more meals ordered - just seem to be a steady stream of things that eat up money.
Congrats, get sleep, stay healthy yourself.. they are a blessing.
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windaar
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Re: Checklist for the Arrival of a Baby

Post by windaar »

Buy a bunch of paper plates & cups and plastic dining ware, and stop having to do the dishes for a month or two. This really helps when you are both low on sleep and time.
Nobody knows nothing.
Chadnudj
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Re: Checklist for the Arrival of a Baby

Post by Chadnudj »

Congrats!

I haven't had a kid yet (although we're trying), but I would recommend looking at your and your wife's 401ks, IRAs, existing life insurance policies, etc. in terms of direct beneficiaries in case of death. Obviously, you'll probably already have each other listed as direct beneficiaries, but it might not be a bad idea to add the kid after that, in case you both tragically died at the same time, etc.
snyder66
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Re: Checklist for the Arrival of a Baby

Post by snyder66 »

Echo what everyone else added. I wouldn't stress too much over the financial stuff. The wills are very important, however. I would worry more about learning the basics of Parenting. It's pretty scary when you bring your first child home. Relax. Use your parental instincts. And, Be there and enjoy your little one...
gotlucky
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Re: Checklist for the Arrival of a Baby

Post by gotlucky »

Congrats!

Enjoy the $3800 dependent deduction and the $1000 child tax credit if you qualify for them! If you both work, make sure to learn about dependent care credits and dependent care flex spending.

Many people are against them, but I set up UTMA accounts for my kids. I gift low-basis stock every year and have them sell it such that they realize, this year, $2000 in tax-free gains per kid (in CA, one's long-term cap gains rate could be as high as 49% so that's almost $1000 per kid in tax savings). Keep in mind that this is an irrevocable gift and can only be spent for the benefit of the child. All their expenses (schools, camps, activities, etc) are paid from these accounts. If they have anything at 16, I'll probably contribute it towards a car so I can zero it out for FAFSA and/or so won't get much when they legally control it at age 18.

I'm also one of the few people that have Education IRAs set up. I don't like the investment choices and fees in 529s (at least when I looked at them several years ago) and I can use Education IRAs for any educational expense up until they are 30. If they don't use it, I have several young nieces and nephews that I could transfer the accounts to. Worst case, I'll pay the tax and penalty. $2k/year isn't much, but @ 8% that's $75k in 18 years. I don't think Education IRAs and 529s in the name of the parents counts as an asset of the child unlike money in a UTMA would.

Enjoy them. Mine are still young but I can already see where their friends mean more and more to them and reality has set in that mom and dad were never cool to begin with.
sscritic
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Re: Checklist for the Arrival of a Baby

Post by sscritic »

dlprop wrote: 3. Do the social security/birth certificate paperwork at the hospital (and as someone mentioned, double check everything is correct)
One granddaughter's last name doesn't match her sisters'. They all have four names, and the nurse put two names in the last name field rather than in the middle name field. My daughter's excuse for not catching it: it was verbal and she was drugged at the time.

Of course by now it is too late for you as your wife should have come home days ago.
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