A new baby brings plenty of automatic changes to your household, but one shift you’ll need to make for yourself are the adjustments to your finances. Here are some tips for new parents to set up your family for financial success.
Health & Life Insurance
Just because your insurance covered the birth of your new baby doesn’t mean the child is automatically placed on your health insurance. For most insurance companies, you need to formally notify them of the additional family member within 30 days of the birth. A baby is classified as a “qualifying life event,” so you’re allowed a special enrollment window to make health insurance changes.
If you’re at a point in your life where someone relies on you financially (e.g. new parents), then life insurance is for you. It’s crucial to protect your family against any worst case scenarios. There are plenty of different options, and United Financial can help you find the plan that’s right for you.
Be sure to file a new W-4 at work to claim that additional dependent in your household. You’ll also be eligible for a tax credit of up to $2,000. The Earned Income Tax Credit and the Child & Dependent Care Credit are other tax saving measures that may be available to you as well.
If you haven’t yet, it’s imperative that you go through the necessary estate planning to make sure your family is protected in the case of a death. You’ll need to draw up a will and determine a power of attorney, medical directives, and health care proxies for both parents. You’ll want to name a guardian(s) for your child as well.
Surprise expenses are bound to pop up, especially with a baby in tow! Give yourself peace of mind by saving up three to six months of living expenses to cover unexpected costs such as car failures or medical expenses.
It’s never too early to help your child avoid student loan debt. Start saving today, and you’ll be able to help your child when the time comes. There are a variety of different saving options available that we can walk you through.
At United Financial we’re here to serve you. Let us help you to formulate the best way to financially protect your family! Stop in at one of our six locations today, or call us at 989-777-3620 to take the first steps.