Updated on 09.05.07

Five Financial Moves I Made Within Three Days Of The Birth Of My Daughter

Trent Hamm

Even while my daughter was still in the hospital, I was already doing lots of little things to prepare for her future. I found that, just as with my son, my immediate instinct when holding that little baby in my arms was to protect her and make sure her world was as safe as possible. Here’s what I did.

I started a 529. I actually did this a bit before she was born, but the account was actually in my name with me as the beneficiary. I already have the paperwork ready to transfer it to her name so that the account is completely hers.

I gave her a “birthday present” in her 529. This was similar to what I did with our son – I put a little dollop of seed money into that 529 very close to her birthday. This little bit of money will grow for almost two decades before she’ll use it. I use College Savings Iowa to manage the 529s – it’s managed by Vanguard and has some solid investment options.

I added her to our life insurances. She and our son are now equal secondary beneficiaries on the insurance. If something happens to me and my wife, I want her to receive half of the life insurance money in a trust (the other half goes to my son). This way, even though we wouldn’t be able to be there for them all the way along, we would at least be able to help them a bit financially as they enter adulthood.

I started paperwork rolling to change our health insurance significantly. Before she was born, I studied our health insurance options and found that switching us all to a family plan after the birth of our child was a very financially effective move – it put me on better insurance and, amazingly, the price actually went down slightly for all four of us versus our setup with just the three of us.

I deposited a handful of dollar coins into her piggy bank. Over the last year, I got a big pile of the new dollar coins and have been using them with my son to introduce the idea of money. Both of our children have a piggy bank, and to give her a little start, I deposited some dollar coins into her bank. This will give her some change to jingle in a year or two when I go through the same process with her.

What else? The other things I did to prepare for her coming home were non-financial but numerous. It’s amazing all of the things that needed to happen before she arrived home. One big tip: if your parents are offering to come to help out, take them up on it. They were invaluable.

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  1. Daisy says:

    I forgot to give you my congratulations on your new daughter. :)

    Anyway, it’s real good you’re starting to save for them this early. I think my parents also did that for me, and it helps to know I have that to fall back on.

  2. Pinyo says:

    Congratulation and thank you. This post will be valuable to me in the near future.

  3. Daria says:

    I just wanted to echo the congrats!

  4. PF says:

    Congratulations! We are expecting a daughter in 8 weeks. This is my first. Within 3 days of her first birthday, she can expect to get fed, burbed, and changed!

    I was told that in Colorado, no one under 18 can inherit money directly, even if you have them listed as beneficiaries. A custodian will be established and the money will go to them on behalf of the children. Do you have a trust set up for your children? We will be doing that shortly.

  5. steve says:

    congratulations! my first daughter was born 10 days ago, so this is a very helpful post to give me some great ideas on how to help my daughter out financially!

  6. Geoff says:

    One additional item for your task list … update your (and your wifes) wills. If you don not have wills then get them.

  7. Laura says:

    congrats! your kids are going to be saavy. College costs are only gonna go up, and damn but they’re expensive already.

  8. Amanda says:

    Many congratulations to you!

  9. Leo says:

    529? I had to work my butt off to get through college and so will my children. It’s a tradition in my family. My parents are very wealthy and helped out when I got into money trouble a few times, but that’s about it. Making your own way builds character.

    We would have made good Spartans.

  10. Congratulation on the baby!
    Great web page you have here I have learned a lot

  11. Grant says:

    I agree with Geoff that you should update your will. If your will is designed properly it should handle all the effects of your estate such as life insurance benefits, establish what age the children inherit and who manages the estate for them if they are too young. Doing it this way means that as your circumstances change you do not have to adjust every different investment and policy – the will establishes your wishes very clearly

  12. Ellen says:

    Sign up for UPromise. (upromise.com) If you do any online shopping, do it through their website and earn cash for your child’s college.( the stores contribute a percentage of your sale.) You can also register credit cards and grocery store savings cards. I did this awhile back, and although I don’t often think about using it, I earned $150 painlessly. (It would have been much more if I had used it religiously)
    Friends and family can be added to your child’s account so if they don’t have college bound kids, their savings can be added to your account.
    The money can be deposited into a 529 account, or you can take it as cash. Good luck with your new addition.

  13. NIck Post says:

    I just started a 529 for our daughter who’s 4. This is through our state and Van Kampen actually manages it. I specifically put it into their global (I really hope they go heavy into China). I’ll retire one month after she starts college, so I have got to get my ducks in a row. Though, I could always use some of my 457b to help her. But, I’ve already told her, if she can get the military or a scholarship to pay for it, I’ll give her $50k, which will be the equivalent of about 1.7 years of college, if the online extimates are right for my area.

  14. J says:

    Believe it or not, I’m an estate planning attorney. I just was puzzled by something you wrote – you made your son and daughter secondary beneficiaries of your life insurance policy, but then you also said she would get the money in trust. These are two different things. Either you make a trust for the benefit of your daughter the beneficiary of a policy or you make your daughter the beneficiary. If it’s the latter and she is under (18 in many states), there will have to be a guardianship established, which can be somewhat expensive, until she turns 18 (in most states) and the remaining money would then go outright to her.

    I agree that updating your Wills is also important, and nice thing there with the 529 plan. Just be aware that often management fees in those plans can be higher than other savings funds.

  15. Nikki says:

    I am scared to start a 529 because in so many years, a lot can change, and although I want my kids to go to college, what if it’s not in the cards at that time? Then what is the penalty to not use it for college?

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