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Starting a family? Take these 10 steps to prepare financially

Having a baby means big changes to your personal finances. Whether becoming a parent is in your near or distant future, making smart moves now could help you save money, feel more in control and have greater peace of mind that you're ready for the responsibilities of a baby.

Here are 10 steps to consider:

1. Review your health coverage

Having a baby can be expensive. Health insurance, if you have it, can help you pay some of the costs. Contact your insurer and ask about your copays and other out-of-pocket costs for maternity care, delivery and new baby wellness care, including immunizations for the first few years.

2. Plan for family leave

Many employers offer extra time off as a benefit for new parents. If your employer is a public agency, public or private elementary or secondary school, or company with at least 50 employees, you're legally entitled to up to 12 weeks of unpaid leave to care for a new child. To find out how much time you're allowed and whether it's paid or unpaid, contact your human resources department. If you'll be taking unpaid leave, review your budget to ensure you have funds available for expenses during that time.

3. Arrange for childcare

Infants require round-the-clock care from a responsible adult. This type of care can be expensive. If you're planning to hire help or place your newborn in daycare, you should start checking out your options early, especially if the place you like has a waiting list. Some new parents decide not to return to work after the baby is born, but it still makes sense to check out your options in case your circumstances change.

4. Make a new-baby budget

Once you have a handle on the bigger expenses headed your way, it's time to set up a budget to account for the little things that add up. To avoid any surprises, start checking out prices for diapers, formula, baby food, bedding, clothing, and other items you may need. Don't forget to include extra laundry detergent and babysitters' fees for your date nights. Ask your friends, family and coworkers how much they spend. Also remember, buying in bulk could save you money.

5. Top off your emergency savings

No matter how well prepared you are, you will get some surprises as a new parent. Saving for these unexpected costs can help you avoid borrowing and give you peace of mind knowing you have savings set aside.

6. Plan to get a Social Security Number for your child

Having a kid can save you money at tax time. To claim a variety of income tax deductions and credits, you'll need a Social Security Number (SSN) for your child. You can request an SSN along with a birth certificate at the hospital. If that's not an option, fill out Form SS-5 Application for a Social Security Card.

7. Update your life insurance

Life insurance protects your family from the loss of your income if you die with this coverage in force. Some employers offer life insurance as an employee benefit. You may want to purchase more coverage for yourself or your spouse or partner when you have a child. Revisit your accounts after the baby is born so you can update your beneficiaries for your life insurance, will and investment accounts.

8. Revisit your disability insurance

Disability insurance protects you and your family from the loss of your income if you're unable to work for an extended period of time due to a covered disability. With a new child, you may want to add more disability coverage to make sure your income replacement will be adequate for your family.

9. Open an education or tuition savings account

It might seem a little early to start saving for your baby's future education, but every year counts when you're working toward a long-term financial goal. A dedicated savings plan can help you start accumulating funds as soon as your baby is born or maybe even earlier. There are a lot of options from standard savings accounts to 529 plans. A college savings account can be an attractive gifting opportunity for grandparents or other family or friends. Even if you only put in $15 per paycheck, your investment will add up over time.

10. Start saving for future expenses

Kids grow up a lot faster than many parents expect. If you feel like you're financially ready for baby's first couple of years, consider setting aside extra money for future expenses like summer camp, sports or music lessons. Your child may be ready sooner than you'd think.

Growing your family can bring a lot of changes to your lifestyle, but it doesn't have to be a financial burden. By planning ahead now, you can buy yourself time and energy that can be spent loving on your new baby.

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