Babies and Families

5 Financial “To-Dos” for New Parents

Becoming a parent brings great responsibility - for many that can range from providing basic needs to a college education. Stay on top of your financial needs with a few basic to-dos designed to help you secure your financial future.

New Parent Financial Steps

Financial Checklist

5 Financial “To-Dos” for New Parents

If you're a new parent, you have a lot of decisions to make, especially when it comes to your finances. From starting a college fund, creating your will, and securing the right type of life insurance - the process of what you should be doing and when can feel overwhelming.

To help, we've put together a short list of financial “to-dos” so that you might be able to stay on top of certain money matters and hopefully, create a more secure financial future of your family.

Get life insurance for you, your spouse, and your child

Life insurance is critical for new parents. If you don't have a policy, now is a good time to get one - on both of your lives. If you already have an existing life insurance plan, then review your limits to make sure that you have enough to support your growing family should either one or both of you unexpectedly die.

Now is also a good time to purchase a policy for your new baby. While there are many different types of life insurance to choose from, permanent policies such as whole or universal life have the potential to earn cash value over time. That's money that can help fund things such as college expenses or a down payment on a first home.* Some policies may have a guaranteed purchase option that could allow your child to buy additional insurance in the future as an adult- regardless of his/her health.

Protect your income with disability insurance.

Your income is your greatest asset. If you have a disability policy through your employer, find out how much coverage you have. For example, do you have a short-term or long-term policy? Disabilities lasting three months or longer are more common than you might think. Protect your income so that if you were to become sick or injured and couldn't work, you'll have enough income coming in to meet your financial obligations. You might even have the option of purchasing a disability policy rider on an existing policy outside of what your employer offers.

Start a college fund.

There is no time like the present to start a college fund for your child. One way to begin could be with a 529 college savings plan. Not only can a 529 plan help you save more, but it can provide you with federal tax advantages (and in many cases, state tax advantages) as long as you use withdrawals for eligible educational expenses, such as tuition and room and board. Read more about the benefits of a 529 plan on the Protective Learning Center.

Create a will.

Who would take care of your child if you both were to die? Creating a will and naming a guardian for your child ensures that they will be raised by someone who you would want to care for them. Without one, the court will make this important decision for you.

Update your beneficiary designations.

From your retirement plans to your life insurance policies, now is a good time to update your beneficiary designations. Doing so ensures that your child will receive the proceeds in the event of your death.

A growing family can mean a lot of changes. By taking care of a few financial matters today, you can help ensure that nothing slips through the cracks should a death or disability occur. For more information on starting a college fund or purchasing a life insurance policy for your child, visit the Protective Learning Center.

* Loans against the policy accrue interest and decrease the death benefit and cash value by the amount of the outstanding loan and interest.

Was this article helpful?
4
1

Financial To Do List: College Funds to Wills

If you're a new parent, you've got a lot of financial matters to consider. From starting a college fund to securing the right type of life insurance, now is a good time to make some important decisions to secure your family's financial future. This article presents five new parent “to-dos” to help you get started.

For more information, visit the Protective Life Learning Center


All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Learning Center articles may describe services and financial products not offered by Protective Life or its subsidiaries. Descriptions of financial products contained in Learning Center articles are not intended to represent those offered by Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax-related decisions. For information about Protective Life and its products and services, visit www.protective.com.

Companies and organizations linked from Learning Center articles have no affiliation with Protective Life or its subsidiaries.

WEB.1884.02.16