Amid the excitement of baby showers and preparing the nursery, parents yearn to give their new child the best of everything. Perhaps one of the best gifts is to provide a sound financial footing so with that in mind, here are some practical ideas as you prepare to welcome your new family member.
Remember Social Security
Get a Social Security card for the baby for lots of reasons. You’ll need a Social Security number for the baby for you to claim her/him as a dependent on your tax return. You’ll need it to open a bank account or buy savings bonds (even though the money is in a custodial account), or in the sad event that you’ll file for disability or survivor benefits.
Begin Accumulating Interest
Open an interest-paying bank account in the baby’s name and deposit those cash gifts from family and friends. If Junior receives a substantial sum, consider a Certificate of Deposit (CD) for higher earnings, or invest in a mutual fund for long-term returns.
Get Health Insurance Coverage
Contact your employer’s Human Resources Department to make sure your little one is added to your health insurance program. If possible, also take advantage of your company’s flexible spending account to pay for child-care expenses or medical expenses not covered by insurance.
Revise Your Will
Update your will and name a guardian for the baby to make sure that she/he is properly cared for in case something happens to you as parents.
Read the Fine Print on Gift Cards
Gift cards are popular for numerous occasions. If you receive some for your baby, be sure to check if there’s an expiration date. Some cards also have maintenance fees or other restrictions, so read the fine print to avoid losing value on the card.
Know Your Priorities: Retirement Comes First
You want to save for college, but if the budget is stretched, and you have to choose between saving for retirement and the baby’s college fund, save for retirement. There are lots of ways to finance college, but you’re in charge of financing your retirement.
Protect Your Family’s Security
It’s also important to have adequate insurance to protect your family, should you become unable to work. At WSLife.com, we understand the whirlwind of emotions that accompanies parenthood. We can help provide a sense of security that comes with good planning.
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Western & Southern Life does not provide tax or legal advice. Please contact your tax or legal advisor regarding your situation.
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