Starting a Family? 10 Things New Parents Should Know About Money

Starting a family is an exciting life change for new parents. While caring for a child involves lots of feeding, diapering, and nurturing, there are essential financial and legal issues to address.

This post will cover ten financial things new parents should know. You'll learn how to reduce risk with insurance, make doctor visits and childcare more affordable, get a head start on college expenses, and protect your child's financial future.  

1. You must add your child to your health insurance

Once your child is born, or adoption is final, you have 60 days to add the newest member of your family to your health plan. If you miss the deadline, you'll have to wait until the next open enrollment to get your child insured. 

So, contact your employer's benefits administrator to find out what paperwork to complete. And if you don't have a job with health insurance or are self-employed, contact your existing health plan or shop and compare options at Healthcare.gov or your state marketplace.

2. You need life insurance

Life insurance protects people who depend on you for financial support, such as a spouse, aging parents, and your new child. When you die, your beneficiaries receive a lump-sum payment, known as a death benefit. They can spend it on anything they like, such as a mortgage, rent, auto loan, childcare, education, or funeral expenses.

If you're worried that life insurance is expensive, you shouldn't be. Studies have shown that consumers overestimate the cost of life insurance by as much as three times! 

Studies have shown that consumers overestimate the cost of life insurance by as much as three times!

So, it might surprise you that if you're in your 30s or 40s with relatively good health, you can get an affordable policy. For instance, a 20-year term life policy that pays $500,000 may cost less than $30 per month or $360 per year.

To know how much life insurance you need, consider answers to the following questions:

• What assets do you own (such as bank savings, investments, and real estate) that could get liquidated to cover expenses?
• How much debt do you have?
• How much annual income would your surviving family members need, and for how many years?. 
• What are...

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