Financial Checklist for Your First Baby: What Every New Parent Needs to Plan in 2026

Welcoming your first child is both exciting and overwhelming, especially when you’re trying to make smart financial decisions along the way. A clear financial checklist for your first baby can help you feel more prepared for what comes next. From medical costs to childcare, insurance, and long‑term savings, understanding each step can bring real peace of mind. With the right plan, you can focus on enjoying your growing family instead of worrying about the unknowns.

Stage 1: Healthcare Planning Before Baby Arrives

Choosing Your Pediatrician

If you’re planning for your first child, you’ll want to start searching for your pediatrician between three and six months before your due date. Your health insurance company should have an online resource available for you to search for in-network providers. You might have already developed a short list after talking with friends and family about what pediatricians they use or recommend.

Once you’ve narrow down a short-list of potential in-network pediatricians, consider how much you value the following factors:

If you conclude that you want to work with a pediatrician who is out-of-network, and who can provide the right care for your family, you’ll want to understand what that will cost and how that choice fits into your savings priorities.

Estimated Prenatal, Delivery, Post-partum Costs

Remove the stress of unknown medical bills during the birth of your first child by gathering written cost estimates. You can estimate the total cost of care before, during, and after delivery. Knowing these costs can help you financially prepare to welcome your newest family member.

Did you know that doctors will schedule around 13 prenatal visits?

You may already have experienced the chaotic symphony of people who help deliver your child. While it can look like a seamless team, remember that each group will charge you separately for their services. Your specific experience will vary depending on a variety of factors. For example, how you deliver your baby and your insurance coverage. Consider the following groups who might help you deliver or play a role in your overall care when you’re planning for your first child:

• Obstetrics and Gynecologic professionals
• Anesthesiologist and Certified Registered Nurse Anesthetists team
• Hospital nursing staff, facilities, and professional staff (i.e. laboratory and pharmacy charges)
• Pathologist
• Pediatric professionals
• Mental health professionals

You can request a written cost estimate for medical procedures and treatments from your health insurance company or directly from your providers. Your health insurer can work directly with the health care providers to get the additional information needed to complete your estimate request. Be sure to ask questions and identify what is not included in the estimates.

This is simply an estimate of the total cost of care that you will owe and how much your insurance company will cover.  The final numbers will vary depending on your delivery experience.

Once you know how much you can expect to pay, you can start saving for this happy day.

FAIR Health, Inc., a national, independent nonprofit organization, estimated the median allowed value for in-network child delivery in Missouri was ~$11,411. This reflects the charge allocated to both you and your health insurance plan. It does not reflect your specific out of pocket cost. Importantly, this reflects the total treatment cost including the delivery itself (e.g., pharmacy, nursery, labor and delivery room, medical and surgical supplies, room and board for the mother), anesthesia, fetal nonstress tests, ultrasounds, laboratory work and breast pump. This data point was derived from a September 2024 data set. Your experience and costs will vary.

Qualifying Life Event Triggers Health Insurance Plan Review

The birth of your child is considered a “Qualifying Life Event” or a change of status event. This means that you can elect to change your health insurance coverage after your child is born.  If you wish to change your benefit election you have between 30 and 60 days of the Qualifying Life Event. Each plan’s change window will vary.

Other family milestones like adoption, becoming foster parent or legal guardian, fit the Qualifying Life Event definition.

Now that you understand that you can make a health insurance plan change, you’ll want to analyze how each health insurance plan available to you supports your family. Here are some key health insurance plan variables to consider:

• Bi-weekly premium deducted from your paycheck
• In-network and out-of-network deductibles
• Out-of-pocked maximums for in-network and out-of-network care
• Coinsurance rates
• Anticipated future usage
• Family medical history

Reviewing each plan’s Terms of Coverage provides you with the details. Details like types of care, caps, prior authorization requirements, exclusions and waiting periods, cost sharing, and appeal rights.

As part of your analysis, would you be better off in the long term by selecting a high-deductible health plan (HDHP) and contributing to a Health Savings Account (HSA)? HSAs have distinct advantages and disadvantages. It’s important to quantify your costs and your goals. If you want your HSA to fund a short-term need, that might not make financial sense. If you want to use your to fund a long-term goal, that’s a good starting point for further analysis. Just don’t let the tax advantages of an HSA to be your only guiding factor.

Lastly, your anticipated due date can influence which health insurance plan works in a particular year. For example, if your child is due in late December, your delivery may occur in either the current plan year, or new plan year. This can affect your deductibles, out of pocket costs, and benefits elections across two different plan years. Families can model both scenarios. Estimate how much of your deductible and out-of-pocket maximum you’ll have met by December. A delivery before year end benefits from costs already paid, and deductibles accrued. If you deliver in January, these limits reset to zero.

Health FSA for Pregnancy Expenses

A thoughtful health FSA strategy enables you to allocate pre-tax dollars toward healthcare costs you’d otherwise pay for with your after-tax income. You can assess whether to participate and how much to contribute to a health FSA by answering three separate questions:

Should you participate at all? If your family has predictable medical expenses of any meaningful amount, then yes. The tax savings are meaningful and spread throughout the year’s payroll cycles.

The next threshold question is whether you can forecast your FSA eligible expenses reliably enough to avoid significant forfeiture.

How much should you elect? This is central planning question for most families when evaluating a health FSA. Generally, elect to contribute what you are confident that you’ll spend. Start by inventorying known recurring or regular expenses; prescriptions, co-pays, contact lens, glasses, and orthodontia. Do you anticipate any new high-dollar expenses like a planned procedure?

Then, factor in your plan’s carryover maximum or grace period feature. In 2026, you can carry over $680 into 2027. Electing the maximum contribution amount could put too much of your contributions at risk of forfeiture. The “optimal” health FSA election is the amount you’ll spend with near certainty.

FSA vs. HSA? For households on a high-deductible health plan, a Health Savings Account (HSA) provides a long-term savings vehicle with distinct advantages. The health FSA functions as a “spend this year” account. If your employer offers only an FSA – a common enough scenario – there’s no tradeoff to make.

Here is a guide to health FSAs in 2026, with practical examples and relatable scenarios. It shows how everyday households use a health FSA to build more control and confidence into their health spending. By the end, you’ll be equipped with clear next steps to apply to your own situation.

Stage 2: Protecting Your Family’s Income

Parental Leave and FMLA

First, you and your spouse can research your company’s process for filing FMLA and applying for parental leave benefits. Once you understand what is available, map out a plan for who is going to care for your child during the first year. Identify any care and income gaps so you can adjust your plans or factor that into your savings strategy.

The Family and Medical Leave Act (FMLA) has eligibility requirements, qualifying events and “serious health conditions”, notice requirements, as well as job and benefits maintenance protections. Use it to support your family’s goals and protect your position.

It’s a smart practice to keep all your FMLA related communications in writing, including your application, supporting documentation, and your employer’s responses.

Term Life Insurance

Evaluating your life insurance coverage is an essential step for many growing families. Specifically, a term life insurance policy can provide your family with financial support should you unexpectedly pass away.

You can use term a life insurance policy to transfer the risk of your unexpected death to an insurance company, rather than your family retaining that risk. Your term life insurance policy is active for a pre-determined number of years – referred to as the term – and at the end of the term your policy expires with no maturity value. In return, you pay a set, annual premium each year your policy is active. If you own a term life insurance policy, that policy only pays a death benefit during the policy’s term, and it has no savings component. Notably, your life insurance death benefits are also not taxable if your surviving spouse is the beneficiary.

A sensible term life insurance policy can provide you and your family with the following:

• A predetermined death benefit amount for surviving family members in the event of the policy owner’s death.
• Liquidity and available funds to pay for debts, taxes, and the costs of estate administration.
• Beneficiaries with an inheritance that has been shifted from one generation to another in a tax-efficient manner.

As a starting point, evaluate matching the term of your policy with your largest liabilities (e.g. your mortgage or college tuition) and annual expenses (e.g. living expenses).

Assess how your family would comfortably pay down debt, fund lifestyle/living expenses, educational expenses, and personal savings in your analysis. You’ll also want to factor in your existing savings and life insurance. Here is a guide to term life insurance in 2026, covering key terms, and practical considerations in an educational overview.

It’s important to avoid simple rules of thumb when you evaluate how much life insurance coverage you need. You need a personalized life insurance policy that truly protects your loved ones and the quality of life you want them to enjoy.  A term life insurance policy personalized to your life allows you the flexibility to build your financial resources and fund your savings priorities. A term life insurance policy can provide you and your family with a financial safety net. That safety net allows you to save for your retirement, your children’s education, or other savings priorities, rather than keeping large amounts of your cash readily accessible/liquid.

Disability Insurance

A disability insurance policy can provide financial protection for you and your family if you were to become ill, experience an injury that prevents you from working or working in your specialized field. A disability insurance policy only covers you, or whoever is the insured person. It does not provide coverage to other family members. As you consider whether this type of coverage is right for you and your family, personalizing solutions for you and your spouse is possible.

Disability insurance is available as both a short-term policy and a long-term policy. As the names suggest, each provides coverage for different benefit periods. The Benefit Period is the maximum length of time that the disability benefits will be paid:

• Short-term: Typically ranges from three to six months.
• Long-term: This can range from a few years to up to age 65-70. It is rare for a new LTDI policy to have a lifetime benefit period.

Given this dynamic, it’s helpful to view your disability insurance choices covering two distinct time periods.

When you evaluate policies that best fit your specific situation, gather quotes and conduct due diligence on insurance companies. Seek out unbiased, objective perspectives and information from professionals whose interests are aligned with your own. Here are three practical approaches to consider during your application process:

1. Organize Your Information: Before you begin your disability insurance underwriting process, you’ll want to organize information on your medical history, employment details, tax returns, and other financial records. Consider requesting a checklist of the required documents and information from the insurance provider. Securely share and dispose of any of your personal/sensitive information.

2. Provide Truthful and Accurate Information in Your Application: The information you share should be accurate and truthful. Insurance companies rely, in part, on your information to assess your risk and determine the appropriate disability coverage and premiums. If you fail to disclose relevant information, your policy could get cancelled, or your claims could be denied. If you apply for long term disability policy, it’s common for you to go through full medical underwriting before the insurance company approves or decline your coverage. While medical underwriting is not onerous, it adds extra time to the approval process.

3. Address Your Pre-Existing Conditions: Provide detailed information about your pre-existing conditions, including diagnosis, treatment history, and ongoing management plans. This information allows the insurance provider to evaluate your risk accurately. Failing to disclose pre-existing conditions can lead to claim denials or exclusions for related medical expenses in the future.

When you’re ready to tackle this essential topic, here is a guide to disability insurance in 2026, covering key terms, and practical considerations.

The relationship between Short-term Disability, Paid Parental Leave, and the Family and Medical Leave Act (FMLA)

Simultaneous Use: You don’t have to choose either STDI or FMLA. If your health condition qualifies for both, you can use STDI for income replacement and take FMLA leave to protect your job.

If you plan to take paid parental leave, you can take FMLA leave to protect your job, too. Your employer-sponsored short-term disability insurance policy won’t allow you to receive paid parental leave and STDI payments.

You might be able to coordinate your STDI benefit for a period of time before or after you take paid parental leave. Sometimes just knowing what to research is enough to get started. If you’re unsure about your specific situation, your HR team should be able to provide you with employer-specific resources to review in the context of your personal situation.

Stage 3: Tax Planning for Childcare Costs

Daycare Waitlist and Estimated Costs

If you anticipate sending your child to daycare, finding the right provider/environment takes time. Like researching your child’s pediatrician, finding the right daycare might not be the cheapest or most efficient option. Understanding how much daycare costs can help you plan your family’s updated budget

As a starting point, survey friends and family about their recent daycare experiences. If you travel to/from the office every day, are there any great daycares along your route? Otherwise, the daycare’s proximity to your house can be a real limiting factor. Here are some additional ways to evaluate your options:

You can also explore additional opportunities to help your child grow and develop. For example, is there a local Parents-As-Teachers or similar organization in your area? These services provide parents like you with purposeful, age-appropriate training and curriculum, in your own home. It can also help give you peace of mind by screening your child for development delays.

If you’re considering hiring a personal nanny or night nurse, those types of household employee relationships represent a different set costs, taxes, and planning considerations.

Dependent Care FSA: A Tax-Efficient Way to Pay for Childcare

If you plan to send your child to nursery school, daycare, pre-K, or summer camps while you and your spouse work,you know first-hand how childcare costs represent a significant, and growing, annual expense for many American families. Thankfully, many families can contribute to a dependent care FSA through their employer.

This pre-tax benefit account can help reduce your taxes depending on your specific situation.  Specifically, when you contribute to your dependent care FSA you do not incur payroll taxes on the contributed portion of your income. Like so many topics in financial planning, coordinating with a qualified tax advisor can be an important step when planning your dependent care FSA.

Consider these situations where a dependent care flexible spending account is a useful option for your family:

• Daycare, nursery school, or preschool
• Before- and after-school care
• Babysitting / nanny expenses

If you pay these expenses for a dependent under age 13, so that you and your spouse/partner can work, explore how you can be reimbursed under your dependent care FSA plan. Experiences and services like tutoring, overnight camps, or non-work-related babysitting are not eligible for reimbursement under current dependent care FSA rules.

In 2026, the dependent care FSA contribution maximums are:

• $7,500 for single taxpayers and married couples filing jointly.
• $3,750 for married couples filing separately.

If contributing to your dependent care FSA is a savings priority for you, familiarize yourself with the essential details of these tax-advantage accounts with this piece.

Child and Dependent Care Tax Credit (CDCTC)

You can use your dependent care FSA with the child and dependent care tax credit (CDCTC). The qualified expenses you pay with your DCFSA need to be different from the qualified expenses covered by your child and dependent care tax credit.

The CDCTC is a non-refundable tax credit, meaning the credit amount claimed can’t be greater than your income tax liability. When used correctly, you can reduce your federal income tax liability based on your qualified child and dependent care expenses if you are working or are looking for work.

The maximum CDCTC amount you can claim depends on the number of qualifying individuals:

• A maximum of up to $3,000 if the taxpayer has one qualifying individual.
• A maximum of up to $6,000 if the taxpayer has two or more qualifying individuals.

Your CDCTC is calculated by multiplying the qualifying expenses by a predetermined “applicable rate”.

The rate varies by the taxpayer’s adjusted gross income (AGI). For tax year 2026, the maximum applicable rate is now 50% for taxpayers with AGI of $15,000 or less. For joint filers, the applicable rate phases down by 1% for each $4,000 of AGI above $15,000. The applicable rate will not go below 35% until AGI exceeds $150,000 (married filing jointly). At which point, the applicable rate phases down by 1% for each $4,000 of AGI to a floor of 20%. Here is an illustrative chart showing this:

Most importantly, for every dollar of dependent care FSA excluded from income, you must reduce the maximum amount of qualifying expenses claimed by the CDCTC. For example, if you contribute the full $7,500 to your dependent care FSA and you have two or more children, then you would have $0 in CDCTC available ($6,000 CDCTC – $7,500 DCFSA).

In practice, most taxpayers will receive a greater marginal benefit from the DCFSA income exclusion than the CDCTC tax credit. For example, if a taxpayer has a marginal income tax rate of 24.00% and 7.65% of payroll taxes, that could reduce their tax bill by 31.65% (24.00%+7.65%) for every dollar they contribute to their dependent care FSA. The credit would lower the tax bill by 20% for every dollar applied toward the credit.

Child Tax Credit 2026

The child tax credit allows taxpayers like you to reduce your federal income tax liability by up to $2,200 per qualifying child in 2026.

The refundable portion of the credit is often called the additional child tax credit (ACTC). It’s value is equal to 15% of earnings that exceed the current $2,500 threshold, and it’s maximum per child value is $1,700. Families with three or more children can choose to calculate the refundable portion of the credit using an alternate formula as well.

For 2026, there are modified adjusted gross income (MAGI) phase-outs based on filing status and new requirements around furnishing social security numbers to qualify for the credit.

Stage 4: Estate Planning for New Parents

Choosing a Guardian

Naming a guardian in your will is one of the most important decisions you can make as a parent because, without a designated guardian in your will, a court will decide who raises your children. A process that may not reflect your wishes. When you name someone as your children’s legal guardian, it helps ensure that your children live with a trusted person. Someone who shares your values, parenting philosophy, and ability to provide a stable home. It also lessens the potential for family conflict, as relatives may otherwise dispute custody in court during an already difficult time.

Estate Documents You Need to Review Before Your Baby Arrives

There are several tools for you to consider in your estate planning, including a will, durable power of attorney, and advance directives. For many families, an estate plan organizes and expresses your wishes for how you want your assets managed and distributed before and after your death. As a parent, your estate plan helps memorialize how you want your children to be cared for and reflect your values.

These estate planning tools can protect you, and your family, if you become incapacitated or pass away. Before your child arrives, consider whether you want to establish a trust for you and your spouse, or for your child. At the most basic level, the purpose of your trust can be to:

• provide for the continued management of your assets during your lifetime in the event of your disability,
• avoid the expense and delay of probate at the time of your death, and
• provide for the disposition of your assets after your death in accordance with your wishes.

While it can be tempting to tackle your initial estate planning through a DIY approach or through a low-cost internet vendor, consider first consulting with an attorney specializing in estate planning in your state.

To get started, consider evaluating estate planning attorneys who are affiliated with the local estate planning council in your area. The right estate planning attorney for you can help create legally enforceable estate planning documents for your specific situation.

Stage 5: The Post-Arrival Administrative Checklist

Stage 6: Saving and Investing for Your Child’s Future

Emergency Fund

Start by saving one to three months’ worth of living expenses. Prioritize Liquidity. You can help dampen the financial shocks of unforeseen events by creating and funding your emergency fund. Catastrophic events could happen to your health, the health of a family member, your home, vehicle, or other asset.

While proper insurance coverage can help shift some amount of your risk it is often not cost-effective to completely protect you against those losses. That’s where the emergency fund can, at least initially, be the financial cushion you need when something in your life does not go according to plan.

Your emergency savings fund can help you avoid high-interest consumer debt (i.e., credit card debt) and provide you with the comfort and confidence that you have financial breathing room in case unexpected events happen.

If you like the idea of living your life knowing that you have six-, twelve- or eighteen-months’ worth of cash reserves, consider adding to your emergency fund. This can be especially beneficial if your income is tied heavily to variable compensation, a volatile industry, or if you are self-employed.

Liquidity is the most important feature to prioritize in the emergency fund savings account. That feature aligns well with savings-type vehicles. In my experience, emergencies do not announce themselves in advance.

529 Plans

With families deploying a mixture of student loans, scholarships, federal work-study, grants, current income and investment assets to pay for higher education, a 529 account is just one of the many tools that families have available to them.

Given the variety of additional funding resources available to families for undergraduate-related expenses, you’ll want to understand how you can use 529 assets before, during, and after your child’s undergraduate years.  529 accounts allow families a flexible, tax-advantaged way to save and invest in support of the following educational goals:

• Kindergarten through 12^th grade (K-12)
• Trade Schools / Apprentice Programs
• Undergraduate studies
• Qualifying graduate schools
• Student loan repayment

Depending on factors like where you live and what 529 plan you use, a 529 account can support your family’s education funding goals. Explore whether a 529 account aligns with your savings priorities. Understand potential trade-offs. Confidently transform your children’s educational dreams into achievable goals.

As a parent, it’s important to evaluate whether funding your own retirement is a higher priority than your child’s future education. For some families, that means you want to analyze the right balance of retirement and education funding contributions.

Trump Accounts

Trump Accounts are a new type of traditional IRA created for the exclusive benefit of eligible individuals under age 18 who have a Social Security number. During the account’s “growth period”, funds may only be invested in eligible mutual funds or ETFs that track indexes of primarily U.S. companies. An account’s growth period ends on December 31 of the year before the child turns 18. Distributions are restricted significantly during the growth period. Non-exempt contributions are capped at $5,000 annually during the growth period.

After the account’s growth period ends, the account can transition to a standard traditional IRA, potentially convert to a Roth IRA, or roll over to another eligible retirement account. Importantly, once the account beneficiary reaches age 18, they have control over the assets.

Notably, the U.S. government offers a one-time $1,000 pilot program contribution for eligible children born between January 1, 2025, and December 31, 2028. No contribution to any Trump accounts is permitted before July 4, 2026. These accounts understandably do not require earned income to receive individual contributions.

If you’re considering opening an account, you’ll want to be very clear about your account goals. Depending on what you want to achieve, there are other accounts that are better suited to education funding and retirement planning.

Coverdell Education Savings Account (ESA)

A Coverdell ESA is a tax-advantaged account you can set up to pay for qualified education expenses. These include K-12 and higher education costs such as tuition, fees, books, supplies, equipment, room and board (for at least half-time college students), tutoring, uniforms, and certain technology.

The beneficiary must be under age 18 when you establish the account. Special needs beneficiaries are exempt from this age limit.

You can fully contribute to a Coverdell ESA if your modified adjusted gross income (MAGI) is below the limit for the year. Contribution phase-outs begin at $95,000 ($190,000 for joint filers) and fully phase out above $110,000 ($220,000 for joint filers). Contributions must be made in cash, are not tax-deductible, and cannot exceed $2,000 per beneficiary per year across all Coverdell accounts. Excess contributions are subject to a 6% excise tax. Contributions must stop once the beneficiary reaches age 18.

All assets in the account can grow tax-free while they remain in the account.

When you take a distribution, it is entirely tax-free provided the amount does not exceed the beneficiary’s adjusted qualified education expenses for the year. If a distribution exceeds those expenses, the earnings portion of the excess is subject to income tax and a 10% additional tax. All account assets must be distributed within 30 days of the beneficiary turning age 30 — or within 30 days of death — unless the beneficiary is a special needs beneficiary.

Financial Checklist for First Baby: Frequently Asked Questions

The Next Step

We help busy parents and professionals like you develop financial plans to address questions like:

• How can we save for a fulfilling retirement beyond our 401(k) plans?
• What does it take to save for the kids’ education and make a lifetime of memories along the way?
• These causes are close to our hearts. What are our options to give even more meaningful support?

As your financial planner in St. Louis, we can help you get organized and start feeling more confident that you are making progress towards your savings priorities.

Working with your financial planner in St. Louis can provide you with the right mix of accountability, collaboration, and long-term thinking.

When you know who and what are truly important, we can help you create incredible clarity about your spending and savings priorities. Clarity to confidently save for and spend on what matters.

If you’re ready to take the next step and work with a financial planner in St. Louis, let’s talk.

Disclosure

This commentary is provided for educational and informational purposes only and should not be construed as investment, tax, or legal advice. The information contained herein has been obtained from sources deemed reliable but is not guaranteed and may become outdated or otherwise superseded without notice. Investors are advised to consult with their investment professional about their specific financial needs and goals before making any investment decision.