Welcoming a new baby into your home is a joyful time! As a new parent you are feeling hopeful about your little one’s future. Start planning for that bright future today by taking a few financial planning steps that can help set your family up for success. Whatever your financial situation, starting now, even with “baby steps,” can have a tremendous positive impact.

If you aren’t sure where to start, we created a simple checklist as a guide.

While there can be many steps in financial planning, the first important step is to start! Time is your friend when it comes to financial planning areas such as saving, investing and insurance protection for your family. The beauty of creating a budget and developing a financial planning checklist when your children are young is that you have plenty of time to factor in changes along the way. Savings and investments can benefit from time to grow, and life and disability insurance for you and your children may be more affordable the younger you are.

Begin With a Few Basics

• Consider the need for an emergency fund. Financial sources recommend having three to six months of living expenses in savings. While that can be challenging, it's essential to make a start with a manageable amount and be committed to the purpose of the emergency fund (only use when necessary!)

• Begin or reevaluate retirement planning. You can't care for others (including children) if you do not take care of your own needs. Take advantage of your employer's retirement plans, especially if they provide matching contributions, and set up monthly pre-tax payroll deductions. Make sure you are aware of retirement saving options available to you. Self-employed? Consider an IRA.

• Consider life and disability insurance. Life and disability insurance are crucial for protecting your family’s financial well-being in the face of unexpected events. It’s hard to think about or plan for, but if you were to experience a fatal or debilitating accident or illness, you would want your family to be financially secure.

• Look into available tax credits. Review what tax credits and deductions you might qualify for while your children are young and possibly in day care. In addition, there may be other tax benefits available if you invest in a 529 education savings plan for your child’s future education.

• Start saving for future education now (you’ll thank yourself later). Consider saving for your child's future education needs as a priority in your financial planning steps. According to the College Board, one year of tuition, room and board and expenses at an in-state public university is currently more than $29,000.
  
  This cost underscores the importance of saving early, which can help you mitigate the financial burden when your child is ready for college or other future education. Plus, if your child does not pursue college, there are many other permitted uses of 529 funds.
  
  In a hypothetical example, if you start saving in a 529 account for your newborn today and contribute just $25 a month for 18 years, your child could have about $8,730 by the time they are ready for college (assuming 5% in annual earnings). In another hypothetical example, if you start saving in a 529 account for your newborn today and contribute $100 a month for 18 years, your child could have around $35,065 by the time they are ready for college (assuming 5% in annual interest). Investments are subject to risk and loss, though starting early can have a positive impact on compounding growth.
  
  The good news is that you can start saving now for your child's future education in a tax-advantaged 529 savings account. Setting up an account takes about 15 minutes, and you can open an account with no minimum contribution required.

Raising children requires an investment in time, love and money, and with a solid financial plan in place, you can make sure you’re saving toward the things that matter most, including their future education. Get started by opening a 529 education savings account with The Education Plan today.