Financial tips for new parents

New Baby PDF

Becoming a parent is an exciting journey—one that brings new joys, responsibilities, and important financial decisions. Whether you’re expecting your first child or welcoming another addition to your family, preparing for the financial realities ahead can help you build a secure foundation for your loved ones.

What steps should you take when a new child arrives?
Add your baby to health insurance right away. Most employer plans allow 30 days; marketplace plans generally allow 60 days. Enrollment within the window is typically retroactive to the birth/adoption date. Line up parental leave details. FMLA can provide up to 12 weeks of unpaid, job protected leave; some states also offer paid leave—check eligibility, pay rates, and how to apply.

Are there any tax considerations or benefits that can lower costs?
Claim your child as a dependent to access the Child Tax Credit. If you pay for care so you can work, you may also qualify for the Child and Dependent Care Credit. Use a Dependent Care FSA to pay eligible childcare expenses with pre tax dollars (daycare, before/after school, summer day camp). If you’re on a high deductible health plan, contribute to an HSA for triple tax advantaged medical savings; try to maximize if you can. Consider adjusting paycheck withholdings after birth so your cash flow aligns with expected credits and deductions

What are important budget implications to consider?
Build a realistic baby budget that includes one time costs (delivery, nursery items, car seat, stroller) and ongoing costs (diapers, formula, medical, clothing). Childcare will likely be your biggest recurring cost—research options early, join waitlists, and compare net costs after FSAs/credits. Build your emergency fund because kids are expensive. On average, it costs up to $237,000 to raise a child until 18, and this doesn’t include college. Establish a 529 plan once you are fully contributing to a retirement fund.

What estate planning steps should you take after having a child?
Create or update your will to name a guardian and an executor; consider powers of attorney and a letter of instructions for loved ones. Update beneficiaries on life insurance, retirement plans, and other accounts so they reflect your current wishes. Review and increase life and disability coverage if needed to help protect your children’s financial future.