Having a baby changes everything—including how you save and spend money. With so much going on after welcoming a new baby it’s tempting to put off the financial piece of the puzzle until things settle down. But if you do there’s a good chance you’ll keep pushing it down the road. These five tips for new parents will help set your family on the right financial path. 
Adjust Your Budget
Whether you already follow a strict budget or have never budgeted before having a baby makes it essential. You are now fully responsible for the well-being of another human—and even tiny people have lots of needs. Of course you’ll need to account for diapers and baby clothes but don’t forget other expenses like baby-proofing your home paying babysitters or daycare costs. If you’re not sure where to start talk with friends or family members who’ve had babies recently to learn how they adjusted. Our Living Expenses Calculator is also a helpful tool.
Investigate Insurance Options
Adding a baby to the family means updating your insurance coverage. You’ll want to add your child to your health insurance as a dependent. Beyond that consider purchasing life insurance for yourself if you don’t already have it. A budget-friendly term life insurance policy is a good “starter” option. You can always update your coverage as your needs lifestyle and income evolve over time.
Start Saving for College
It may be hard to imagine your little one heading off to college someday but the years will pass quickly. Don’t wait until high school to start saving. A 529 college savings plan is a simple way to save while maintaining full control of the account. Starting early helps reduce the need for your child to rely heavily on student loans in the future.
Prepare a Will
As a new parent the most important thing is ensuring your child is taken care of—whether you are there to do it or not. Estate planning including preparing a will medical power of attorney and living trust ensures your wishes are clear and helps keep your assets out of probate. Just like your insurance coverage your estate plans should evolve and be updated regularly as life changes.
Build Up Emergency Savings
Everyone—single married with kids or without—needs emergency savings. But it’s especially important for new parents. Children bring new layers of potential emergencies and unexpected expenses. Start small by setting aside a bit from each paycheck with an initial goal of three months’ living expenses. Once you hit that keep saving until you reach at least six months of coverage.
