Having a new baby is exciting, but any parent will tell you it's also a little scary. This is a life-changing event, and there’s a lot you and your partner will have to do to prepare for your new child. You’ll have to make sure you’ve got all the gear you’ll need for the baby, and you’ll also want to plan out everything from doctors’ visits to maternity leave.
While you’re doing all this, though, you’ll also want to take some financial steps before your child is born. They might not be as immediately important as other steps you’ll need to take before becoming a parent, but they’ll pay off in big ways while your child is growing up.
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Request a Social Security Number
Your new baby will eventually grow up. When they do, they’ll need a social security number for everything from opening a checking or savings account to getting a driver’s license.
You can usually request a social security number for your newborn on your child’s birth registration form at a hospital, provided you and your partner both know your social security number. If your baby isn’t born in a hospital, though, or you forget to apply for a social security card at the hospital, you can still get a social security number for your baby by visiting the social security website and following the instructions there.
Check Your Work Benefits
When you know you’ll be a parent, you’ll want to talk with your workplace and find out if any benefits are available to you. Find out if your workplace offers maternity leave, and if so how much. This will help you plan out how much time you’ll have for maternity leave. If your workplace doesn't offer maternity leave, though, you'll need to know whether you can take advantage of other benefits, such as paid time off, in order to give yourself time with your newborn.
You’ll also want to see what benefits your workplace offers for parents. Find out how much you’ll have to pay to get a child added to your insurance program, for instance, as well as if your health insurance will offer benefits like childhood vaccinations.
Consolidate Important Documents
While you’re reorganizing everything in your house for the new baby, take a minute or two and make you have all your important financial and medical documents in a safe place. These should include:
- All insurance policies, including life insurance, auto insurance, home insurance and health insurance
- Information about your health insurance benefits
- A list of all your bank accounts and investment accounts
- Mortgage information
- The deed to your home
- Birth certificates for all members of the family
- A copy of your will or your trust
Freeze Your Child’s Social Security Number
This might sound like overkill, but scammers love using children’s social security numbers since adults rarely monitor their children’s financial health as closely as they do their own. The best way to protect your children against someone using their social security number without their consent is to freeze it. Freezing your social security number prevents anyone from running a credit check on you, which means no one can use your information to open a new account.
Putting a freeze on a social security number is easy. All you have to do is create an account on the Department of Homeland Security’s E-Verify website and follow the instructions to freeze your social security number. Freezing a social security number is free, and you can unfreeze it at any time.
Start Saving for College
If you’re going to provide any financial assistance for your child when they go to college, you’ll want to start saving as soon as possible. The optimal account for this is a Coverdell account, where you can save money, invest it, and withdraw it tax-free provided you use the money to pay for qualified higher education expenses. Keep in mind that saving for your child's college fund is a financial goal, and like most financial goals, the best way to achieve it is by making it a SMART goal--specific, measurable, attainable, realistic and time-bound.
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Plan for Your Child’s Future With First Alliance Credit Union
There’s a lot you need to do before your new baby arrives, and that includes making sure you’re prepared financially. Make sure your work will give you the time you need for maternity leave and let your insurance company know that you have a newborn you’ll need to insure. You’ll also want to make sure your baby has a social security number and freeze it until your child is old enough to need it.
You can make sure you’re financially ready to become a parent when you become a member at First Alliance Credit Union. You can open up a savings account to start putting money away for your child and use our free downloadable budget to help you figure out how much money you can put toward items like health insurance, baby clothes and even your child’s college fund.
