Crib? Check. Toys? Check. Don't Forget a Budget, A Will and Insurance.

By Erin Burt
Kiplinger's Personal Finance
Sunday, June 28, 2009

Here are four financial items no new parent should go without.

-- A budget: Before you lay down a dime to prepare for your baby's arrival, know your needs and wants, and determine exactly how much you're willing to spend -- and where the money will come from. Please, please, please avoid going into debt while outfitting the nursery. Begin by budgeting for major expenses, such as paying for the hospital delivery and accounting for any unpaid leave from work. If one parent plans to stay home indefinitely with the baby, make sure you can afford to live on one income and adjust your spending habits accordingly.

After the baby arrives and things settle down, you'll need to make sure there's room in your day-to-day budget for things such as diapers, formula, clothes, toys, doctor visits, photo development and babysitters.

-- Life and disability insurance: For life insurance, you should generally get coverage worth four to eight times your annual salary. Stay-at-home spouses may need their own policy to help pay for child care in the event of their death.

All new parents should make sure they also have enough disability insurance to pay the bills and maintain their standard of living in case they're ever out of work because of a job-related injury. You already may have some coverage through your job -- such plans typically cover up to 60 percent of your salary. Many workers will need a supplemental policy to fill the gaps in that plan.

-- Health insurance: Don't forget to add the baby to your health-insurance policy. You'll want to call your provider before delivery to find out the rules.

It should go without saying that no matter how healthy you are, don't even think about going without insurance when you're bringing another life into the world. Forgoing coverage is risky to your health, your baby's health and your family's financial security.

Without insurance, a normal hospital delivery can cost between $8,000 and $25,000, depending on your location and method of delivery.

The cheapest and easiest way to get health insurance is through your employer. But even if your job doesn't offer it, or if you're self-employed or between jobs, you can still find affordable insurance on your own. Get quotes on individual policies at

-- A will: No matter your financial situation, every parent needs a will to designate a guardian for his or her child if both parents die prematurely. Without a will, a court will decide who will take responsibility for raising your child. Make sure you designate an alternate in case, for some reason, your first choice isn't available.

You'll also want to designate someone to handle your finances. For something this important, it pays to consult a lawyer (about $300 for a fairly simple will; about $200 per hour for more complicated estates).

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