Congratulations, You’re Pregnant! Here Are the First Five Money Moves New Moms Need to Make

Wow, you are going to be a mother! How exciting, and perhaps slightly terrifying. If you’ve talked to other new parents, then you know that the miracle of life also has a way of turning into the miracle of the disappearing paycheck. Babies are wonderful…and expensive. That’s why it is so important to plan now, when you’re still getting a blessed full night’s sleep and aren’t spending your small amount of free time changing diapers and combing spit-up out of your hair.

You have a lot on your mind, but when it comes to your finances, here are the five most immediate steps new moms need to take:

Step One: Figure Out Your Company’s Maternity Leave Policy

If your company has at least 50 full-time employees, it is required by law to offer 12 weeks of unpaid leave. It sounds crazy, but the United States doesn’t require companies to provide paid parental leave. Some companies do offer it as a benefit to their employees.

As soon as possible, sit down with someone from your human resources department and ask them to explain your company’s maternity leave policies. Make sure to ask if temporary disability insurance (TDI) is available, whether you qualify, and what portion of your salary TDI pays. Make sure your partner does the same, and then compare notes.

Together the two of you will need to decide how long each of you can afford to take off work after your child arrives.

Step Two: Decide Which Health Insurance Plan to Go On

You are going to be racking up quite a lot of medical bills during your pregnancy, and once Junior arrives, he or she is going to require regular doctor’s appointments. Now is the time to sit down with your human resources department (you should be making some good friends in HR by now) to learn about all the benefits your health insurance plan offers as well as the costs involved. How much will you have to pay out of pocket for the medical coverage you need during your pregnancy? What about when your child is born?

Again, have your partner do the same at their work and compare notes. Decide which plan offers the best balance of coverage vs. cost for your baby. You may even discover that it makes more sense for one of you to go on the other person’s plan rather than stick with your own!

Step Three: Figure Out Your Work Future

Working full time and raising a family can be very tough. Many professional men, and especially professional women, report regretting not spending enough time with their children. At the same time, you need to be realistic about whether you can afford to leave your job or whether you even want to. Now is the time to start discussing options with your partner. Should one of you stay home? What would that do to your finances? If you both keep working, who will watch the baby, and how much will childcare cost? You may also want to sit down with your boss and explore alternative work arrangements. Many companies offer valued employees flexible work schedules or even telecommuting options. Both you and your partner should discuss these possibilities with your bosses to try to find the right balance between forwarding your career, caring for your child, and meeting your financial goals.

Step Four: Revise Your Life Insurance

When your bundle of joy arrives, you will be responsible for that life. What happens if you die unexpectedly and your partner can no longer rely on your income? Will your partner and child lose your home? What about college? Take a close look at your life insurance policy. Is there enough to cover all of your child’s financial needs if something should happen to you? If not, it’s time to call your friendly insurance broker and up your policy. Even if you plan to be a stay-at-home mom, you should still consider purchasing a term life insurance policy for yourself. The services you provide – childcare, cooking, cleaning, grocery shopping, etc. — are all services that your partner would have to pay for if you were gone!

(Read More: When Life Changes…Change Your Life Insurance!)

Step Five: Look into 529 College Savings Plans

Speaking of college… it’s never too early to start thinking about and saving for this massive expense. (It’s Never Too Late to Get Started Saving for College, either!) A private university in 2016 cost $ 49,320 on average, including tuition, books, room and board, and other incidentals. You know this amount is just going to go up and up and up. The only weapons you have on your side are time and the magic of compound interest.

Start by setting up a 529 College Savings Plan. Earnings are not subject to federal tax and are usually also exempt from state taxes as well. You may also be able to receive state tax benefits, depending on your state of residence. (Did you know that 529 Plans Aren’t Just for Kids?)

These five steps are only the start of your baby financial planning strategy, but they will help you work out some of the most immediate issues so that you can turn your attention to other important matters, like what type of diaper bag to put on your baby shower registry!

Learn more family financial tips that will serve you well as your child grows. If you want to get your financial life in order before your baby comes, also consider starting a Money Club near you!