Since becoming pregnant with baby #2, I’ve been trying to take care of some big-picture financial and legal planning for my family. These aren’t necessarily “fun” tasks, but since I’ve put myself on an indefinite shopping hiatus, and it’s still too early to start stocking up on baby gear, financial research and planning is my current way of “nesting.” Here are some of the major tasks that every parent should consider before having a kid, whether it’s your first or ninth.

Task #1. Create or update legal documents such as a living will, power of attorney, and last will and testament. The purpose of a living will is to let medical professionals know what should be done in case you are on life support or in another dire medical situation. A power of attorney gives your partner (or other designated adult) legal authority to act for you in all legal or financial matters; a medical power of attorney gives your partner (or other designated adult) the authority to make medical decisions for you in case your are unable to make those decisions. Most important for parents is a last will and testament, which specifies who will inherit your possessions upon your death and, importantly, who will be your children’s legal guardian(s) in case you and your partner both die. You can go with an online service, such as Legal Zoom, which will direct you to the correct forms for your state and help you fill them out. Or you can consult with an attorney in your city or town and have them draft these documents for you.

Task #2. Adjust your withholding on your W4. If you’re having a baby, your expenses are going to go up, which means you might want to take home more from your (or your spouse’s) monthly paycheck. The good news is you can change your withholding on your W4 form to have the IRS take out less money from your paycheck each month. Just keep in mind, depending on your tax liability, that this may mean you will owe in at the end of the year instead of getting a refund. Definitely consult with a tax professional if you are unsure whether you should change your withholding.

Task #3. Look into maternity/paternity leave options. If you work for a company or government agency, check with your HR department (or boss if it’s a smaller company) to see what your maternity or paternity leave options are. Make sure you note how long you can take off and whether all or part of the leave will be paid. If you’re self-employed, then think about how much time you can afford to take off when your baby is born.


Task #4. Add new-child expenses into your family budget. You’ll want to think about childbirth costs, childcare costs, as well as expenses such as formula, diapers, baby gear, clothes, etc. Also be sure to adjust your income accordingly if you or your spouse will be taking any unpaid leave.

Task #5. Check your life insurance policy to make sure it’s high enough. A general guideline is to make sure that if you were to die, your spouse would be able to support themselves and your kids for the next 10 years. Many sites have life insurance calculators where you can plug in your numbers to get a rough estimate of how much life insurance you and your spouse should each carry.

Task #6. Plan for childcare. Part of budgeting for a new child means figuring out what kind of childcare you are going to need and how you are going to pay for it. If you plan on going back to work at an office, you might be looking into daycare costs; if you are going to work from home, then maybe a full or part-time nanny is what you need. Do some research on local daycare centers and talk to your parent friends about what type of childcare situation they have. I have found that networking with other parents is a great way to find reliable babysitters and nannies, though you also have the option of sites like (basically a Craigslist for childcare).

Task #7. Set up a college investment account for any existing children. If you’ve been saving for your existing children’s college educations, now is a great time to move the savings into an investment account so that it can start to earn a return. Here is a great website that breaks down the various state plans for college savings if you live in the US. Keep in mind that with 529 investment plans, you can go with any state’s plan regardless of where you currently live and where your children will attend college. (For children in the womb, you will need to wait until after birth to set up investment accounts for them.)

Bonus task. Look into switching your bank account to somewhere with a higher interest rate. We decided to take the opportunity to switch from a big national bank to a local credit union because we feel better about supporting a credit union. I did a bunch of research on local credit unions and narrowed them down based on the criteria I was looking for: free checking, an APY on savings of more than 0%, and access to no-fee ATMs. The one we chose also has a cool bonus feature of kid savings accounts with prize incentives to encourage kids to save money. If you want to make your savings or checking accounts work even harder for you, look into online banks like Ally (which is currently offering 1% APY on savings accounts) or a credit union such as Money One Federal Credit Union, which offers up to 3% APY on checking when you meet certain requirements every month.

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I hope this list was helpful to any pregnant mamas and dads out there who are hoping to get a handle on their finances before the baby is born. Do you have any financial tips or tasks that you would add to this list?

Disclaimer: I am not a financial professional. Please do your own research when making personal finance or legal decisions for you and your family, and a consult a professional where appropriate.