Carrie Schwab Pomerantz
Dear Carrie, We're expecting our first child soon, and there's so much to think about! Everyone tells us to start saving for college right away, but that's so far in the future. What about now? What should we focus on first? --A Reader 

Dear Reader, You're definitely right that there's a lot to think about when you're expecting a baby. (I know from experience!) Cribs and car seats are only the beginning. And while you're immersed in handling the new physical and emotional responsibilities, it's easy for some financial essentials to get lost in the flurry. But as you're well aware, kids cost money, and you need to be prepared. So here are some things to think about now -- before time becomes an even more precious commodity!


From everyday budgeting to ongoing expenses, before the baby comes is the time to do some planning. So sit down together and put some things on paper.

--(SET BOLD) Review your monthly spending. (END BOLD) You may be getting along just fine on your current income, but soon you'll have a whole new set of expenses. Basics such as diapers, formula and baby clothes add up quickly. If both of you plan to work, childcare can really take a bite out of your paycheck. Medical costs are bound to go up, both in insurance premiums and out-of-pocket costs. If you have to cut back, decide in advance how you're going to do it. Can you save a bit more before the baby's born? So much the better.

Make sure you have the right insurance coverage.

Health insurance is crucial. Whether you have an individual policy or insurance through an employer, make sure you have the best combination of deductibles and coverage. You'll also want to consider life insurance. Get enough to cover your mortgage, debts and provide for your child's education. Term life insurance policies can be quite reasonable. Some employers offer life insurance through the company, so check to see what your company offers. You may also want to look into disability insurance to cover your income in case you become ill.

Create an estate plan to protect your child. 

An estate plan isn't only about money. It's also about making sure you designate someone to care for your children if you're unable. At the very least, have a will in which you name a guardian for your minor kids. Without it, the state can choose a guardian. Don't let someone else make this important decision.


Even though you'll have your hands full with the new baby, there are some administrative things you should take care of right away.

Get a social security number for your child. 

Carrie Schwab Pomerantz

Carrie Schwab Pomerantz is a Motley Fool contributor.

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