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There are few events in our lives that impact our financial plans as much as having children. New expenses seem to materialize out of nowhere. Prenatal care, delivery, diapers, baby food, doctor visits, time out of work, cribs, strollers, clothing, and daycare costs are all items new parents have to deal with. From the time you first become aware of the pregnancy to your child's first birthday, you'll very likely incur bills totaling thousands of dollars. It is vital that you prepare yourself and your finances for the changes to come.

Be As Prepared as Possible for Your New Baby

As your child grows, expenses like food and clothing grow steadily from year to year. Many parents find it necessary to move into a larger (more expensive) home and buy another car. Don't forget the costs of things like toys, trips to the amusement park, soccer, little league, swimming lessons, and the inevitable emergency room visits. And finally, after 17 or 18 years of feeding, clothing, and sheltering Junior, you have to pay for college!

It is important that you accommodate these new expenses wisely. Building unnecessary credit card debt is the last thing that you need to be doing as you enter into parenthood. It's important to save and plan so that you can handle this tremendous life-changing event. Here are some ideas to help you prepare for your new arrival:

Set up a Budget: Do this before your baby is born.Keep track of ALL your spending on monthly bills by using this monthly journalizing worksheet, and do your best to estimate any expenses for which you don't have receipts. That way you'll know where you can make cuts when your baby arrives.

Health Insurance: Review your health insurance policies for coverage of prenatal care, deliveries, and hospital stays. Can you choose your own pediatrician, or do you have to stay in the health plan's network? Carefully review your coverage and deductibles and save as much as necessary to ensure you're prepared to deal with the birth comfortably.

Life Insurance: If you don't have life insurance, you may want to consider getting some. Make sure that your child will be taken care of if something happens to you. If you already have a policy, review your coverage to make sure it's sufficient to help your child and your spouse in the event you're no longer there.

Prepare for College: Have you starting thinking about college tuition yet? State-sponsored college savings plans are available (referred to as 529 plans because of their section in the Internal Revenue Code). A 529 plan is an investment plan operated by a state, designed to help families and individuals save for future college costs. As long as the plan satisfies a few basic requirements, the federal tax law provides special tax benefits to you.

Disability Insurance: Again, if you don't have any, you may want to consider getting some. If either you or your spouse becomes unable to work, how will your income be replaced?

Create a Will: More than 70% of Americans don't have one. It's understandable that you might prefer to avoid such an unpleasant subject, but do you really want the state to appoint a legal guardian for your little ones? Of course not. You should decide who would take care of your children if something happens to you.

Assess Your Daycare Needs: It is important to weigh the pros and cons of daycare against the potential income you stand to make if you return to work. While having a fulfilling career is important to some, the joy of raising children is equally satisfying. If the math doesn't add up, you may choose to raise your children until they are old enough to go to school. If you decide that daycare is the best option for your family, do your research. Find out details such as cost, hours of operation, and which age ranges the provider accepts. Take the time to learn about the credentials required for a daycare provider to operate in your state so you know you're hiring a qualified agency. Speak with friends and coworkers about their experiences. Your child may be spending a lot of time with the daycare provider, so take the time to choose a good one. For more information about daycare providers, contact the National Child Care Information Center.

Talk to Your Parents: Your parents can be a terrific resource. Their experiences may be extremely helpful to you, especially when it comes to planning for things that you may not have anticipated.

Bringing a new baby into the world can be hard work. Getting prepared before the baby is born will make things much easier.

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