We were excited by the news that our newest client Quinn was born the last week of August. Quinn was a "surprise" in that his new parents had only 48 hours notice that they'd been selected by the birth mother to adopt this precious baby boy. He's home now with his adoptive parents who are over the moon and no longer sleeping. With no time to prepare for a new family member, we went into fast track mode for making all the changes to his parents' financial plan. As I noted to Debbie, "babies are expensive." "Yes", she replied, having just finished paying for college for her 21-year old son and partially paying for a wedding this summer, "children are expensive." And she wouldn't change a thing.
To provide a sampling of financial areas that we reviewed and made recommendations on for Quinn's parents, here's our list (so far):
- Contact HR at work to update health insurance (and of course the premium went up and the plan needed to change); decide whether the health saving account compatible plan still works or if another plan should be selected (with even higher premiums).
- Look into other employee benefits relating to maternity leave and dependent care and flexible spending plans at work.
- Calculate adoption tax credit numbers and revise tax planning for the year (including child tax credits).
- Increase life insurance for both parents (raising a child through college is expensive and on one income it would be very difficult); evaluate employer coverage versus individually purchased coverage.
- Review sufficiency of employer provided long term disability coverage (a disabled spouse who can't earn an income will be harder to support with a new baby); consider whether a supplemental individual policy should be added.
- Change estate plan to add a children's trust to their will, name a guardian or two, provide funding for guardian, change beneficiary designations on all accounts and life insurance policies.
- Update student loan repayment plan calculations to reflect a new family member (which hopefully will reduce required monthly payments).
- Develop a college funding plan for new baby. College is expensive!
- Completely redo budget/spending plan to accommodate increased insurance costs, day care, and all the fun baby stuff at Buy Buy Baby.
- Change retirement funding plan/projections to reflect realities of actual availability of money for savings.
We'll update this list as we discover more items to consider.
Keep us posted when you have changes in your life, particularly the addition of a new family member, dependent, significant other, or even a new pet. We want to make sure that nothing is overlooked during life transitions.