Financial Checklist for New Parents

Recently, I have been getting a lot of questions from new or expecting parents wondering what they need to be thinking about from a financial perspective. Our daughter recently turned one and as I look back there were 3 big financial boxes to check after she was born.

Prepare for the Uncertain

This is about insurance and making sure your loved ones are provided for if the unexpected occurs. The good news is the likelihood of something happening is small and as a result, the cost to cover the risks are relatively small as well:

  • Health Insurance – Make sure your child is added to your health insurance
  • Disability Insurance – Your biggest asset as a young person is your ability to work. If you are disabled and can no longer do that, your income will need to be replaced and there could be additional costs to care for you. Typically, your employer offers disability insurance. If possible, you should sign up for short-term and long-term disability that covers at least 60% of your income.
  • Life Insurance – If something happens to you, your surviving spouse will likely need some financial resources to provide them flexibility. For most, financial flexibility means replacing income so the surviving parent can cover monthly living expenses or pay for extra child care. For others, it could include having enough to pay off the house or pay for private college for the kids. Bankrate.com has a good calculator where you can plug in your preferences to get a rough number as a starting point. We recommend term life insurance for 20 to 30 years. (https://www.bankrate.com/calculators/insurance/life-insurance-calculator.aspx )

Get a Will – Who will care for your child if you aren’t around?

You may think, I don’t have any money so why would I need a Will. The Will can spell out how assets should pass, but for new parents it’s not about the money. The more important part of the Will is naming Guardians to care for your child if you or your spouse are not there to do so. For many people this decision is not easy and is ripe with family dynamics – “how will my parents feel if we name your parents and not them as Guardian?” or “What about my brother? Yeah…I don’t think so.” You get the picture. While not making a decision may be easier, the tougher choice ensures your child is cared for and you avoid bigger issues down the road if several family members want the job and a judge has to decide.

Balancing Savings – Retirement, College, Living Life

Financially, there will be some changes to your monthly budget (hopefully that doesn’t come as a surprise). Here are some general guidelines on how to allocate savings to keep your financial future on stable ground:

  1. Safety net – Make sure you have an emergency fund of 3 to 6 months of living expenses set aside in a checking or savings account for the unexpected (medical expenses, car or home repairs, etc.)

1a. Take free money –  If your employer has a 401k with a match, contribute enough to get the match. This is 1a because you can balance this with #1 as you build your emergency fund.

2. Other Savings – Roth IRA Contributions, 529 Savings for College, or taxable savings. The name of the game here is balance. For example, if funding college is a goal, you shouldn’t put all your extra savings into a college fund for the kids at the expense of your long-term retirement plan, taking a needed vacation, or saving for a home down payment. Layout your goals and figure out how cash can be divided to chip away at each of them.


Neil Teubel, CFP® is a Wealth Manager at BDF and also leads the Financial Planning Committee. The FPC champions the continual improvement of the firm’s planning processes so that every client gets the most comprehensive and thoughtful planning possible. The committee ensures BDF’s team has cutting-edge tools and the latest information covering the entire financial planning landscape to best serve our clients. Neil received an undergraduate degree in Financial Planning from the University of Illinois Urbana-Champaign and a master’s degree in Personal Financial Planning from Texas Tech University, where he earned his CERTIFIED FINANCIAL PLANNER™ certification.