So you’re a new parent, and in between naptimes and playtimes, you’re feeling the responsibility that comes with parenthood. You want to make sure your child’s future is taken care of, but just how do you do it?

Here is a checklist of to-dos to get you started, listed in order of priority.

Life Insurance

As a new parent, you need financial protection for your child in case something happens to you, your spouse, or worst-case scenario, both of you. The money from the life insurance policy needs to be enough to support your child all the way through college.

For a small monthly payment, you should be able to buy a term life insurance policy that will cover you and your spouse for 20 to 30 years.

The next obvious question is, how much life insurance do you need to buy?

There are quite a few rules of thumb on this, but for today, we will just go over the “10x your income” rule. So, if you and your spouse make $150,000, then you need $1,500,000 in life insurance.

This rule is very simple—and also outdated. A good financial planner would assess your needs and make a recommendation based on your assets and liabilities.

Revocable Trust (or Will)

A revocable trust serves as your legal document for what happens to your family should you pass away. For new parents, the trust states who becomes the guardian of your child if you die while your child is under the age of majority. If you do not have guardianship in place, the court will decide who takes care of your child.

A trust is also a good idea because you can dictate what will happen to your financial assets should you pass and who has control over those assets. One common technique for parents is to name a guardian to watch over a child and a trustee to manage the money for the child.

In so doing, you will make sure that your children are being watched over by someone you trust and that money is available for them as well.

Note: A will can accomplish most of this for a much cheaper price. That said, if you live in California, it makes the most sense to get a revocable trust.

Emergency Fund

One of the more basic concepts—which, sadly, we often see botched—is an emergency fund (aka savings account). New parents should consider setting aside at least three to six months of expenses for a rainy day.

For example, if you are spending $5,000 a month, you would want to have $15,000 to $30,000 in a savings account that is easy to access. This money should be used for financial emergencies only and not for a new Chanel purse or a Harley-Davidson motorcycle, no matter how urgent the need to buy those items may seem!

College Savings Account 

Before you start saving for your child’s college years, you should make sure you have an adequate emergency fund, have paid down your debt, and are putting enough money away to afford retirement. If you have those boxes checked, you can move on to a college savings account.

There are many options to save for college, including UTMAs, Coverdells, 529s, life insurance, Roth IRAs, and savings bonds.

The most common college savings strategy is to use a 529 plan. The 529 plan has some unique benefits that typically make it the best option to fund a child’s college education:

  1. Contributions to the fund are not tax deductible, but earnings (or interest) will grow tax-free.
  2. You remain in control of the money and can change the beneficiary at any time. This means that if one of your children does not use it for college, you can name another child as the beneficiary.
  3. A 529 plan can pay for your child’s tuition and fees, books and supplies, computer supplies and related expenses, room and board, and special needs equipment.


Being a new parent is much more than just making sure your child is properly fed with clean diapers and a nice crib to sleep in. Start now in laying a foundation to make sure your child is taken care of in case you’re not here to do it yourself.

A few hours of planning today will help ensure your child’s future is in good hands.