When having a child, what should you consider regarding assets, debts, insurance, and tax planning? Here are a few questions parents (and parents-to-be) should consider when financial planning for a baby:
👶 Does your employer offer a Dependent Care Flexible Spending Account?
Consider contributing to that account – the funds can be used to pay for qualified childcare expenses!
đź©ş Do you have an HSA?
You may be able to contribute $3,650 (or $7,300 for family) and an additional $1,000 if you are age 55 or over!
🍼 Do you need to add your child to your health insurance policy?
You generally have 30 to 60 days to do so, and be sure to find a doctor or pediatrician in your insurance network!
❤️ Do you need to review your life insurance and disability policy?
Consider increasing the amount of coverage you carry to fund future child-related expenses such as college costs.
✨ Do you need to update how much is withheld from your paycheck?
Consider updating your W-4
đź’° Do you expect your child to receive cash gifts?
Consider opening a custodial account (UGMA or UTMA) and possibly a 529 account.
🧸 Is your MAGI below $263,410, and did you adopt a child?
You may be eligible for the Adoption Tax Credit, which is worth up to $14,890 (subject to phaseout restrictions)
See my flowchart for other questions you should discuss between yourself and your partner when it comes to financial planning for a baby, and growing your family’s financials!
Family Financial Flow Chart
As a family financial planner, I aim to help young families set strong foundations and goals to follow for decades to come.
