What Issues Should I Consider When Having or Adopting a Child

This checklist highlights a number of financial issues that you need to consider when having or adopting a child including: 

• Review your cash flow, and update your budget to include the additional costs to their budget involved with raising a child. If one of the parents decides to be a stay-at-home parent, how does the loss of income impact their short and long-term financial picture? They should check to see if their employer offers any sort of assistance, such as childcare subsidies or extended paternity leave 

• If you receive any cash gifts on behalf of their child, it’s wise to parents to consider funding a 529 plan to help with college savings. You will also want to see if you can increase their funding to an HSA if they have one to cover increased medical costs on a tax-efficient basis 

• You will want to notify their health insurance provider in a timely fashion to ensure that the new child is fully covered. In selecting a pediatrician for the child, they will want to consider whether the doctor is part of their provider’s network 

• It’s key for you to review and update life insurance coverage in light of the addition of the new family member 

• You will want to review their tax situation to ensure you take advantage of any tax credits that they may be entitled to relating to the child and any dependent care. If the child was adopted, you may be entitled to a tax credit related to that as well 

• Having or adopting a child is a good time for parents to start doing some long-term planning around areas like saving for college or perhaps a child’s wedding. Estate planning issues such as updating Wills, Trusts, beneficiary designations, etc. should be front and center as well