Baby on Board

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Never has life taken on as much meaning as when the first baby comes home.

There are many, many ways to begin working your finances anew with an infant in the household; some ways to get started:

  • Get a social security number for the baby. If you didn’t get the form for this from the hospital or if you delivered elsewhere, call 800-772-1213 to get the ball rolling. You’ll need this number to set up a bank account for Baby as well as for any gifts of stock, bonds or cash your child receives. The social security number allows you to claim a dependency exemption on your tax return.
  • Review your tax witholding with your employer. The more allowances you claim on your W-4 form, the greater your take-home pay. Find out how you can add an extra allowance for your baby.
  • Write or update a will. Should you or your spouse die without one, the state will step in and distribute the deceased’s property according to Tennessee laws. Consult with a lawyer so that your baby will retain the maximum number of your assets and so that you can select a guardian of choice.
  • Rethink life insurance. You will want enough insurance to cover your baby through college in the unlikely event that something happens to you. You may already have coverage through your employer, but if not, and you have to buy on the open market, look for term insurance (it ends after a 10- or 20-year term), which is considerably less expensive than permanent.

Source: How to Invest $50 to 5,000 by Nancy Dunnan (Harper Perennial)

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