For expectant new parents, those final few months before baby arrives are usually spent volleying between twiddling their thumbs and fastidiously readying themselves for baby’s arrival with must-read parenting books, checklists, classes, online research, registries, and doctor appointments. But even the most prepared new parent tends to overlook one important thing during this busy time: creating (or adjusting) the family financial plan.

Just like getting those Tdap boosters, posting the pediatrician’s after-hours number on the fridge, and assembling the crib, getting a thorough financial check-up before baby arrives will help families avoid a massive amount of stress and confusion in the future.

We sat down with financial advisor (and mom to one, with another due any moment now!) Sarah Behr of Simply Financial to find out exactly how new parents can prepare their bank accounts for their growing family. Here’s a quick and dirty list of the seven areas of your financial life that should be squared away before the sleepless nights and subsequent exhaustion set in.

Budget
If you and your partner (if you have one) have merged accounts and already share expenses, this may be a no-brainer. But if you still retain your individual accounts and split expenses, it’s time to have an honest conversation about how you’ll divide the cost of raising a child. Health insurance, medical expenses, childcare, diapers, clothing, and food add up quickly. You’ll need to take into account not only the amounts you and your partner earn, but how you will divide caregiving duties. I suggest budgeting an additional $2,000 to $5,000 per month from birth to age 5 (this will vary considerably depending on geography and childcare options).

Emergency Savings
At a minimum, your family should have three months worth of living expenses in a savings account. This will provide a cushion in the event of an unexpected expense or the loss of income. Ideally, you have these funds parked in a high-yield savings account where the idle cash is earning interest of approximately 2%.

Estate Plan
Everyone should have a Will, a Power of Attorney, and an Advanced Healthcare Directive in place. Most states have a standard statutory form that is simple to complete and will cover your bases. Preferably, you’ll have a comprehensive Estate Plan that will provide your family the most protection. I recommend seeking out an affordable attorney who will help you determine what type of documents you need in place to provide guidance to your family in the event something happens to you. 

Health Insurance & Benefits
Adding a new baby to your family qualifies as a “Life Event,” which means you have the opportunity to update your Health Insurance coverage, Dependent Flexible Spending and Health Savings Account. If you haven’t funded these benefits in the past, it may be a good time to consider adding this coverage.

Life Insurance
With a new addition comes new responsibilities, and one key area is providing for your family in the event that something happens to you. If you have life insurance provided by your employer, it’s most likely basic coverage that won’t sufficiently provide for your beneficiaries. The rule of thumb for life insurance coverage is, opt for a plan that will provide 10 times your annual salary.  The one word to remember is TERM. The only type of life insurance you really need is Term Life, which will cover your family for as long as your partner and children are depending on your income. Life Insurance is a tricky business, and the best way to avoid getting mixed up is to stick to Term Life for 10x your income. 

Retirement Savings
Let’s do our kids a favor and save enough money to retire comfortably. It’s unlikely that social security alone will provide ample income, so you’ll need more saved in order to maintain your quality of life. Our life expectancies are much longer than they were 50 years ago—this is progress! But it means we must stay vigilant throughout our prime earning years, continue to set money aside despite increasing childcare expenses. Our children will thank us!

College Savings
If you’re confident your child is college bound, start saving money in a 529 College Savings Account. This investment plan provides tax-sheltered growth for your investment, which means the investment gains aren’t taxed upon withdrawal. The one caveat: the money must be used for qualified higher education expenses, such as tuition for secondary school or university. Keep in mind, there are many ways to pay for college—scholarships, work/study, financial aid—so, if it’s too difficult to save for college and retirement, prioritize retirement and deal with the college savings at some point in the future. 

If you feel overwhelmed, you’re not alone! Don’t try to tackle this entire list all at once, set realistic goals and prioritize what’s most important for your family given your circumstances. 

For more on this topic, check out these quick and easy tips for saving money as a family.