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Create Your New-Dad Financial Checklist

Oct 11, 2016 3 min read

 

The two little words, “I’m pregnant,” can have a huge impact on someone’s life. And for soon-to-be first-time dads, the emotions upon hearing those words can range from pure elation to crippling fear.

This is understandable. As a soon-to-be dad, you’re entering a whole new realm of responsibility – you will not only have to change diapers…you’ll have to afford them too! Long gone are the 1950’s where one family member managed the finances—now it’s a shared responsibility between both spouses.

But it’s not just about you or you and your partner anymore. You’re going to have to get a stronger handle on your finances, because, in a manner of speaking, you’re adding another little person to the payroll.

But the time before becoming a brand-new dad is also extremely special, and it goes without saying that it only happens once in a lifetime. This means you should prepare like crazy while also taking time to enjoy the journey.

To help, we’ve created a checklist for the soon-to-be new dads out there.

 

During the first trimester…

  • Boost emergency savings – Before having a child, you could probably get away with having three months of savings to cover costs if needed. But now, with a kid on the way, you should increase that to six months or more in order to protect against the unexpected.
     
  • Create a new budget – This will ease any anxiety you may have over all the new expenses. If you need places to cut, look at your restaurant and entertainment budget, as there will soon be less time to go out, anyhow. Instead, you’ll be spending on diapers, baby food and formula, which all totals, on average, $2,448 per year Opens in new window.
     
  • Attend the doctor’s appointments – It can be intimidating to consider the financial impact a child will have on your life, especially when you can’t yet see his or her adorable face. That’s why it’s important to go to the doctor’s appointments with the mother, so you can see your child’s development up close. This will help it all feel more real.
     
  • Give your partner preferential treatment – The first trimester isn’t easy; it’s typically when the bulk of the morning sickness hits. On top of that, few others can yet tell that your wife or partner is pregnant. That means you need to provide the preferential treatment she’s not getting elsewhere. This could include regular backrubs, some special home-cooked meals and you doing a bit – or a lot – more around the house.

 

During the second trimester…

  • Update health insurance – The more you have in place before your child is born, the less hectic it will be in those first few days when you’re adjusting to life as a dad. That includes discussing health insurance with your employer’s HR department, so you know which forms need to be filled out within the first 30 days of your child’s birth. Also, ensure you are accounting for your future child across all your available workplace insurance benefits, including life and disability plans.
     
  • Determine the paternity leave equation – Discuss with HR your paternity leave options. More companies are offering longer leave times for fathers, as they recognize how important it is for new dads to be with their growing family during those crucial first weeks. Understand how much time you can take while still getting full pay. If you only receive partial pay, look at your budget to see if it’s enough to get by.
     
  • Take a birthing class – In order to aid your child’s mother on the big day – and to put your mind at ease when certain issues arise in the birthing room – take a birthing class with your partner. That way, you can learn the answers to any nagging questions you may have.
     
  • Interview pediatricians – The second trimester is a good time for soon-to-be parents to look into the doctor their child will need, before the more uncomfortable third trimester begins.

 

During the third trimester…

  • Review your life insurance – In order to raise a child from birth to age 18, it will cost about $245,000, on average Opens in new window. That doesn’t include college costs. But for new dads, it’s often inexpensive to obtain life insurance on top of any coverage offered in your employee benefits. A 20-year term policy can help ensure your child’s future is cared for, even if you can't be there for it.
     
  • Update your will – And for those without one, it’s a good time to create it. This also provides an opportunity for you and your partner to discuss who will take care of the little one in case the worst happens and you are both unable to do so.
     
  • Take a hospital tour – Practice makes perfect, so you’ll know exactly where to go when your partner is ready to give birth.
     
  • Enjoy the baby shower – If it’s co-ed, you’ll get tons of great advice about getting sleep while you can. If it’s not co-ed, make a date with your friends – you won’t see them as much once the baby comes.

 

 

Once you’re a new dad…

  • Family time! – The first few weeks as a new father are unlike any other time in your life. This stage is confusing, scary and grueling, but it’ll all be worth it once your kid cracks that first smile.
     
  • Start saving for college – With a minimum initial investment – often as little as $25 – you can open a 529 tax-advantaged savings plan to hold all the monetary gifts you’re receiving. Remember, you don’t have to choose your state’s plan, but make sure to review the limitations and fees your selected plan has.
     
  • Check your budget – Double-check the budget you crafted before the baby was born, and make sure it still works now that your bundle of joy is actually here.
     
  • Keep funding your retirement – It’s often tempting to stop funding the 401(k) when your child arrives, in order to have a little more money to spend in the now. Be sure to continue contributing, though, as this will help ensure your financial stability in the future.

 

Bottom Line

Many unexpected issues and events will arise during your wife or partner’s pregnancy. You can’t plan for it all, but by scheduling these financial must-dos, you can be more prepared for anything that arises. Plus, it’ll free up your time to focus on what’s really important: the magic of a brand new baby.

 

 

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