Financially planning for a baby

Pregnancy is a roughly 9-month runway to prepare financially for the biggest expense category of your life. Most parents use it to buy a crib. Here's a more complete checklist.

Before the baby arrives

1. Understand your health insurance. Know your deductible, out-of-pocket max, and what a normal delivery costs in network. Budget for that number plus 20%.
2. Open or verify a Dependent Care FSA for next plan year if available.
3. Build a baby emergency fund separate from your regular emergency fund — 2 months of expected new expenses.
4. Research parental leave. Know exactly how much paid and unpaid leave you have.
5. Update or create your will. Name a guardian for the baby. This is the entire reason people make wills.
6. Update your life insurance. Term life for both parents, typically 10–12x annual income.
7. Update beneficiary designations on retirement accounts. They override wills.
8. If you're considering childcare, start applying — many centers have 6–12 month waitlists.

After the baby arrives

• Add the baby to your health insurance within 30 days (usually a qualifying event).
• Get a Social Security number to open accounts and claim tax benefits.
• Open a 529 plan only after your own retirement is on track.
• Revisit your budget — 2-month snapshot of new reality, then adjust.