The tired new parents' money checklist

Update your health insurance

Some parents may not realize -- and not all insurance companies are clear -- that in order to get coverage for your newborn, in most cases you have to add them to your policy within 30 days of their birth, says Choudhri.

I nearly missed the boat because someone at my insurance company told me I could send in my son's birth certificate whenever it arrived, and they would add him to our policy.

Fortunately, I called back -- on the 29^th day after his birth -- to double-check this, and I was able to add him onto our policy.

Be sure to find out what form you need to fill out, Choudhri adds, and have it on hand so someone else can submit it if your recovery from the rigors of childbirth is slower than usual.

And speaking of health . . .

You'll want to earmark part of your emergency fund for the blizzard of co-pays that you're likely to face when your child is young and visiting the doctor frequently.

"For that first year of day care or school, assume you will be in the doctor's office once a month and that you will need to buy medication for at least half of those visits," wrote one reader.

Likewise, say several readers on the Women in Red message board, it's easy to use up all your sick days taking care of yourself or your kids when they're sick. You'll also need that extra cushion if you end up taking days off without pay.

College-savings plans

My first worry after my son was born was his college education. I think I heard the phrase "529 plan" more during my pregnancy than any other time.

And if your retirement savings are on track, you will want to read Liz Pulliam Weston's column "The 5 best college-savings plans," so you can set up just such a plan.

But according to Pond, if you aren't fully funding your retirement, you may not want to jeopardize your future to contribute to junior's education. "People overcome the college challenge," he says, "but they don't always overcome the retirement challenge."

"A 529 plan is desirable particularly when the grandparents are funding it," Pond says.

Set up child-care funds

Readers on the Women in Red message board were adamant on this point: Whether you're planning to use only the occasional Saturday-night baby-sitter or full-time child care, save early and often.

"If I could rewind the clock, I would have started saving for a daycare fund the minute I found out I was pregnant," one reader said. "Keep saving over the years because you'll always need this fund. After day care, there's after-school care, summer camp care, etc."

Choudhri also recommends taking advantage of your company's dependent care account benefit, if available. "It works like a flexible spending account (for health-care expenses), except it's for child care," she says.

And while Coverdell accounts don't let you save much for your child's education -- about $2,000 per year, per child (and certain restrictions apply) -- Choudhri says they can be valuable savings vehicles, because they allow you to spend the money on education-related equipment your child will inevitably need, like a computer.

One last thought on financial sanity . . .

Rather than add this item to your To Do list, put it at the top of your To Don't list:

Maybe it's just me (although I doubt it), but as a brand-new parent I have found the shift from having total flexibility and freedom to being at home every night rather . . . inspiring. It inspires me to sneak my credit card out of my wallet and go shopping online.

I haven't bought anything yet -- which speaks to the powerful influence of the Women in Red on my soul -- but boredom and excess energy can undermine financial well-being before you can say, "Add that to my shopping cart!"

In order to channel your money for good and not material things, keep the above list posted somewhere handy -- tape it to your shirt? -- and remember that now you have an extra reason to keep your financial ducks in order.

Updated Sept. 16, 2008

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