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Your Financial Life
By Caitlin White / May 4, 2015

Financial Checklist for New Mothers

mother's_day

May marks a lot of big events—graduation, Skin Cancer Awareness Month, Cinco de Mayo and Memorial Day. Another important day in May is Mother’s Day. Created in 1908 and deemed an official holiday in 1914, Mother’s Day typically falls on the second Sunday in May.1

Over four million babies are born in the U.S. each year, making new mothers out of many women.2 If you are a new or expecting mother, consider the checklist below to help ensure you and your family are set up for success. Your children will appreciate you even more!

  • Open a 529 plan: One of the best gifts you can give your child is an education. Set up a college account, such as a 529 plan, in your child’s name. Operated by a state or educational institution, a 529 plan is a type of educational savings account that can help families put aside money for college. College can be expensive so the earlier you start saving, the better. Plus, any earnings on the money invested in a 529 plan grow tax-deferred, and distributions to pay for the beneficiary’s college costs come out federally tax-free.
  • Purchase a life insurance policy: Having a new baby is a major life milestone. With such an important addition to your family, consider purchasing some form of life insurance for yourself. Although talking about the unthinkable is always hard, the younger you are, the lower the price will be to insure you. Consider insuring both you and your spouse, and do your research to find the best policy for your needs.
  • Open a retirement account: Retirement is expensive. To lessen the worries your children may have about you affording your retirement, consider opening a retirement account or contributing to your company’s 401(k) plan if offered. The sooner you start saving, the more you’ll have when you stop working.
  • Pay back any debt: If you were to pass away, any outstanding debt you have could be taken from your estate or assets, such as your retirement or checking account—leaving your loved ones with less. Another reason to pay off debt is the overall cost of caring for a baby. According to the U.S. Department of Agriculture, baby necessities can cost a staggering $15,000 a year.4 With those kinds of expenses in your future, consider paying off as much debt as possible, especially debt with higher interest rates, such as credit cards. In fact, you should consider paying off your debt before you have children.

Motherhood is an amazing journey. Secure your amazing journey by protecting yourself and your children with sound financial and insurance decisions.

1Mother’s Day, History.com.

2Surprising facts about birth in the United States, BabyCenter.

3“Baby Boomers Supporting Kids and Parents,” Good Morning America, August 1.

4Melody Warnick, “Pregnancy vs. paying down debt,” CreditCards.com, September 2, 2008.

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