Lots of things change when you have a baby. Oh boy, do they!

Trust us: you'll be short on sleep as you care for your newborn, so you won't have much time to think about anything else. And you shouldn't. You should enjoy this special time.

But (here we go again with the "but"), there are some money matters you'll need to take care of early in your child's life. To make it as easy as possible for you, we've narrowed it down to seven Smart Money Moves you need to make now to take care of your growing family:

1. Review your life insurance. Make sure you both have enough insurance so you or your surviving spouse can continue making mortgage payments, fund your child's education, and meet other household expenses in case one of you dies. How much coverage do you need? We recommend at least five times your current salary. Term insurance is likely to be your best buy.
2. Review your beneficiaries. Consider naming your child as a contingent beneficiary on any life insurance or pension plan in case you and your spouse die at the same time.
3. Add your baby to your health coverage. You usually have 30 days from your child's date of birth to add your child to your policy without having a medical exam. Here's a tip: If you and your spouse have insurance plans at work, go with the policy that offers the broadest benefits, even if it's more expensive. This is one case where cheaper isn't necessarily better.
4. Review your estate plans. Both you and your spouse should update your wills so that you may name a guardian for your child. This is also a good time to double-check how you want to distribute your assets. You should further consider creating a trust. Should you and your spouse both die, the trust would be funded using assets from your estates. The trust would then pay your child's guardian money to cover the expense of continued care.
5. Take full advantage of the tax consequences, which for once will be in your favor! You get a deduction for every child you claim as a dependent. The child must be under 19, related to you by birth or adoption, unmarried (let's hope so!), and a U.S. citizen or a resident of the United States, Canada, or Mexico for some part of the year. Also, you must have provided more than half of your child's total support for the year.
6. But to reap the tax advantages, you have to be prepared before you file. Apply for a Social Security number as soon as possible after your baby is born. The IRS has to have a record of his or her identity. To apply, file form SS-5 with the Social Security Administration. You can get the form online at www.ssa.gov/online/forms.html, or find the office nearest you at www.ssa.gov/reach.htm or by calling 800-772-1213 (800-325-0778 for the hearing-impaired).
7. Take advantage of a flexible spending account (FSA) if your employer provides this very helpful shelter for some of your most crucial expenses. This account lets you set aside money before taxes are taken out to pay for doctors' and hospital bills not picked up by your insurance, plus day-care expenses. The catch – and it's a big one – is that you must use the money you set aside in the FSA. Whatever is not used by the end of the year is lost.

Page 1 2 Next »