Financial checklist for new parents: 8 smart money moves

Becoming a parent can be a whirlwind of joyful days, sleepless nights and endless to-do lists. As you try to juggle it all, financial planning often falls by the wayside.

While there's plenty of financial advice out there for new parents to consider, making sense of it can be a challenge. This simple financial checklist for new parents is designed to help you navigate the most important steps to take following the birth of your baby—and feel better prepared for the road ahead.

1Update your health insurance coverage

Newborn appointments are scheduled within days of birth, so adding your baby to your health insurance policy should be one of the first things you tackle. However, most employer plans give parents up to 30 days to add a new child to their health insurance policy.

If you're planning to enroll your child in health insurance marketplace coverage, you'll have 60 days to do so. And no matter when you enroll your child during this enrollment window, the policy will start covering medical bills from the day of their birth or adoption. However, keep in mind that missing these deadlines could result in a denial of coverage.

How to get started

Each health insurance carrier is different, but typically a phone call and an online submission of the birth or adoption certificate are the only requirements to add your new child to the policy.

Reach out to your health plan provider using the phone number on the back of your insurance card or contact your HR representative to learn more about what's required. If your health insurance is provided through your employer, your company's benefits administrator may even handle this first step for you.

2Create a baby budget

When it comes to financial planning for new parents, creating a budget is important. Baby-related expenses can be one-time or recurring, and new parents frequently haven't allocated enough within their current budget. Without a solid plan in place, it can be easy to overspend, take on debt or fall behind on your savings and investing goals.

How to get started

If you've already made a household budget, you're off to a great start. Otherwise, your first step is to create one. If you're not used to following a budget, using the 60/20/20 rule is often a good place to start.

Once you've nailed down basic expenses like housing costs, debt payments and bills, start accounting for new baby-related expenses. These typically include medical care, child care, diapers, formula, baby clothes and other essentials. Baby-related expenses can change quickly—particularly in the first year. If you're on a tight budget, revisiting your first-year baby budget frequently can help keep you on track.

3Get insurance coverage

No one wants to think about their own mortality, but as a parent, you have to prepare for the unthinkable. How will your family be taken care of in your absence? Having a robust life insurance policy can help ensure your family's financial security.

How to get started

Insurance coverage is never one-size-fits-all. When choosing, look for a policy that will give you the coverage you need with a premium you can afford. Some experts recommend a life insurance policy that covers roughly 10 times your annual salary. Also consider long-term disability insurance. This will cover a portion of your income if you sustain an injury that limits your ability to work.

4Enroll in a Dependent Care FSA

You may be familiar with flexible spending accounts, or FSAs. These allow you to set aside a portion of your pretax income to use toward qualifying expenses, such as healthcare costs. Some employers also offer a Dependent Care FSA to help parents save on childcare expenses, such as preschool, after-school care, summer day camps and nanny fees. This can significantly lighten the financial load for new parents. For 2025, the current maximum amount you can contribute to a Dependent Care FSA is $5,000 per household—or $2,500 if married, filing separately.

How to get started

Talk to your workplace benefits administrator about whether your organization offers a Dependent Care FSA. If so, they'll be able to provide directions to enroll. Once you do, you can submit reimbursement invoices for eligible childcare expenses.

5Review your beneficiary designations

Now that you're a parent, you may wish to add your child as a beneficiary on your retirement plan, investment accounts, insurance policy or bank accounts. Beneficiary designations surpass other estate documents, so listing your child in your will isn't enough. It's also a good idea to name your child or another loved one as the beneficiary on all relevant accounts.

How to get started

Reviewing and updating beneficiaries can often be done in a matter of minutes if you've already created an online account. In some cases, however, you may need to reach out to the provider to request a form to make the change.

Keep in mind that sometimes there are rules against naming a minor as a beneficiary, as well as tax consequences that come with inheriting certain assets. Make sure you're coordinating with your financial advisor and accountant to understand any potential implications before finalizing your beneficiary decisions.

6Create or revise your will

Family estate planning is one of the most important pieces of financial advice for new parents to consider. If the worst happens, who'll be responsible for your child—and how will your assets be handled? To make sure your wishes are known, complete the legal documents that spell out the answers to these questions.

How to get started

Because these are legal documents, it's best to work with an estate planning professional. However, if you're on a tight budget, a basic will is a good starting point. A will allocates your assets and names a guardian for your child in the event of your death. You can also create a trust to specify the age and circumstances under which your child will inherit your estate.

7Consider a 529 plan

College may feel like a long way off, but it's never too early to start saving for your child's education. A 529 college savings plan can be one of the best investment plans for a newborn baby because it offers several tax advantages. First, your earnings are tax-deferred, which means your savings compound faster. Second, when the time comes, you can withdraw from a 529 account without paying federal income tax, as long as the money is used to pay for qualified education expenses. Third, some states offer state income tax deductions for contributions to 529 accounts.

Another major advantage is that anyone can contribute to a 529 account once it's set up. Grandparents and other loved ones may want to add to the account at various times.

How to get started

You can choose from a variety of federal and state 529 plans. However, different plans charge different fees, so choose a provider you trust.

8Refresh your emergency fund

No matter how much budgeting or planning you do, there's always a chance an emergency will happen and you'll need a large amount of funds available to you as soon as possible. This is why it's important to have a source of cash stored in a dedicated emergency fund.

How to get started

It's recommended to have about 3 to 6 months of expenses set aside in a cash or cash-equivalent account. Using a rainy day fund calculator can help you identify how much you may want to save.

The bottom line

This financial checklist for new parents is an important tool to help you create a bright future for your growing family. The first year of parenthood often flies by in a blur. Yet no matter how little sleep you're getting each night, financial planning can offer peace of mind as you navigate the life chapters ahead.