11 Important Financial To-Dos by Baby’s First Birthday

Like trying to crack the code of wrapping a swaddle that baby won’t break out of, navigating the financial side of new parenthood can sometimes feel like a daunting task. Can’t it just wait until later, like when your baby goes to kindergarten? But like so many things financially related, the sooner you start, the bigger payoff you’ll get later. 

So we’ve partnered with New York Life to help you prioritize—from sorting out parental leave logistics to setting yourself up for tax season, and when to start thinking about saving for the long term, like college tuition or life insurance. Pro tip: no matter how bright or dismal your financial situation’s looking these days, meeting with a financial professional—even just for a free intro chat—can be a major resource in helping your family get your ducks in a row for a more secure financial future. 

Before you leave the hospital:

Provide your health insurance info: Childbirth costs can be shockingly expensive (although the gift you get at the end = priceless), and what you owe will depend on your health insurance coverage. If you have insurance and plan to give birth in a hospital or birthing center, make sure it’s on file before getting discharged so that the bill is sent to your insurance provider to pay their portion before it’s sent to you. If you don’t have insurance (and don’t plan on enrolling after baby’s birth), you may still be able to get discounts or enroll in payment plans through the hospital or birthing center’s billing department, so it’s worth reaching out to negotiate.  

Register baby’s birth and request a social security number: Nestled in the folder of paperwork and pamphlets you receive will be a form to register baby’s birth. There’s typically a question about whether you want to register for baby’s social security number too. While you don’t have to do this immediately, you will need baby’s SSN to declare them as a dependent on your next tax return and to open a 529 in their name (more on that below), so it can help to cross this off your list early on. You’ll then be cleared to order baby’s birth certificate about 2–4 weeks later, depending on the county you deliver in. Giving birth at home? You can apply for a SSN in-person too.

Within the first 14 days:

Update your tax withholdings: Claiming baby as a dependent can reduce your tax withholdings and impact how much you owe on your return or how much you’ll get back in a refund. To do this, you’ll need to file an updated W-4 with your employer, and then they’re legally required to make the changes within a few payroll cycles. While you don’t have to do this immediately, any amount of savings can add up, so it’s worth checking off the list if and when you get a free moment.

File claims for family leave: The criteria for whether you’re eligible to take a break from work (either paid or unpaid) can vary widely—it depends on where you live, where you work and how long you’ve been employed. If you are eligible, many states will require you to certify your claim within two weeks of the reason for starting your leave. This can often require a note from your doctor, so make sure you look into this as you get closer to your due date and build in time to request and receive that note. There’s often a waiting period before getting paid through these programs, so you’ll want to budget for that pay lag in advance.

Within the first 30-60 days:

Update your health insurance coverage: Having a baby is considered a “qualifying life event,” which means that you can make changes to your coverage, whether you want to add baby to your current plan or enroll in a new one. Making changes during this timeframe is important because it allows baby to be covered retroactively for their hospital stay and initial pediatrician appointments (even if you’re enrolling for the first time after baby’s born).

Adjust contributions to FSAs/HSAs: If you have one of these accounts with your health insurance plan, you may be able to adjust how much pre-tax money you contribute from each paycheck (this can vary by employer and insurance carrier). So if you haven’t yet contributed to these accounts, or are able to add more without hitting the maximum annual contribution limit, you may want to consider upping your contributions if your budget allows. The money in these accounts can be used for a variety of medical expenses, doctor visits and health-related items for baby—and for you too (PSA: Check out all of the FSA & HSA eligible items and insurance-covered breast pumps on Babylist). Keep in mind that FSA dollars do not carry over at the end of the year, while HSA does.

If your employer offers a dependent care FSA, you should consider enrolling in this as well. It allows you to set aside up to $5,000 in pre-tax earnings from your paycheck to pay qualified out-of-pocket child care expenses, like a nanny salary or daycare tuition, though like a traditional FSA, the funds are use-it-or-lose-it by the end of the calendar year.

Reevaluate your disability insurance coverage: Short- and/or long-term disability coverage are sections you may have glossed over during your employer’s open enrollment in years past, but now that you have other people who depend on you, it’s worth a longer look. Think about how your expenses would be handled in the event you’re unable to work for a period of time, and keep in mind the areas you may not be able to cut back on (like childcare) if you need to cut back to a tight budget. Tip: check this timing with your employer and insurance carrier, as the window of time to make these changes can vary.

Within the first year:

Consider buying life insurance: While you don’t want to be kept up at night stressing about the worst happening (you can count on baby to keep you awake for other reasons!), it’s important to protect your family in the event that something does happen to you or your partner, if you have one. A permanent life insurance policy, like ones offered from New York Life, can build value over time and give you comfort knowing your family will have financial security if you or a partner were to pass away. 

Draft or update a will: Like having life insurance for your child’s financial security, you’ll want to have a legal plan in place for who will care for your children and inherit your assets in a worst-case scenario. Update your accounts to add your children as your beneficiaries and include intended guardians for your children.

Start saving for college: Yes, really. Those tuition payments are expensive, and only increasing. If you’re able to swing it–after you pay off your debts, set aside some cash for an emergency fund and save for your own retirement—setting aside some funds into an account for baby’s future can make a big difference. There are a number of ways you can invest this money, the most popular being a 529 plan, which is designed to be used on educational costs. Depending on what plan you enroll in, there may even be financial bonuses to open a 529 and fund it with a certain amount of money within your baby’s first year; some states offer grants that automatically seed baby’s account to help it grow.

When filing your first tax return as parents:

Consider those tax credits: There are a few ways that tax credits can help ease the financial burden of being a parent. Two to look into are the Child Tax Credit (up to $2,000 per child) and the Child and Dependent Care Credit (up to $3,000 per child). Your eligibility for these credits depends on a number of factors, including your income and whether you get other dependent care benefits from your employer (like a dependent care FSA), so talk to your tax advisor to see if these can apply to your tax return.

Looking for more financial support for your family? New York Life has plenty of resources that can help your family build a strategy to achieve your financial goals.

This article is sponsored by New York Life. Babylist’s free site, apps and emails are made possible by our sponsors. We limit our sponsored content to relevant partners that offer products and services we believe in and use ourselves. Neither New York Life Insurance Company, nor its agents, provides tax, legal, or accounting advice. Please consult your own tax, legal, or accounting professional before making any decisions.