Having a baby is an exciting time, but it also brings with it new financial obligations.

Over the years, you’ll likely be dishing out a lot of cash to feed, clothe, and generally support them. Use this guide to know how to care for them from their initial steps to their education and beyond.

Get protected

A practical first step is purchasing insurance coverage. Health insurance can help you afford your child’s wellness visits and other covered medical expenses, while disability insurance can aid you in paying your bills if you become ill or injured and can’t work. Meanwhile, life insurance can replace a portion of your income to help your family manage expenses like school tuition and mortgage payments should something happen to you. Consult with your insurance provider to determine which types of coverage and plans are best for you.

Create an emergency fund

From a sudden ER visit to a newly leaky roof, life is full of unexpected costs that can threaten your financial stability, and the strain can be even greater with an extra family member. An emergency fund can help cushion the blow and allow you to weather the challenge. Start by socking away enough to cover a potential surprise bill of a few hundred dollars in an interest-bearing savings or money market account, and then build up the funds by putting a little into it each paycheck. Some experts recommend stashing enough to cover your living expenses, including your food, transportation, and other essentials, for three to six months. Just make sure that if you withdraw from your account, you replenish it when you can.

Maximize tax advantages

Uncle Sam. For starters, you can claim a credit of up to $2,000 per tax year, depending on your income, for each child or qualified dependent under the age of seventeen. In addition, if you adopted your child, you may also be eligible for a federal adoption credit of up to $15,950 to help offset your associated fees.

As another bonus, you can also reduce your taxes by depositing as much as $3,050 a year in a flexible spending account (FSA); this money is deducted from your gross paychecks, so it won’t be taxed. You can then use the funds to pay for your family’s health care and over-the-counter medicines. Also consider depositing funds into a Dependent Care FSA for childcare costs. You do have to use all your FSA funds by the end of the calendar year though, as they don’t roll over into the next one.

Save up

A college education is a sizeable investment—tuition and fees for the 2023–2024 school year average at $10,662 for in-state, public colleges and even more for private universities—but if you start saving now, you can better set your child up to pursue their academic dreams. Your best bet may be to invest in a state-sponsored 529 plan that can grow tax-deferred over time. Many states offer their own options, and you can invest in the asset of your choice. You might even get a state income tax deduction or credit as a result.

A big plus is that anybody can contribute to your child’s 529 (hello good friends, grandparents, and other relatives), and withdrawals aren’t subject to tax as long as they’re used for educational expenses, which can include for qualified secondary-education costs. But you may face a 10 percent penalty if you withdraw funds for nonqualified purposes.

Additionally, in the event your child doesn’t go to college, you can change the 529’s account’s beneficiary to another eligible family member. Or, starting in 2024, you can roll it over into a Roth IRA. Regardless of the path your child takes, a 529 can be a helpful financial option for them.

Update your will

To ensure your child is taken care of after you die, amend your will to include them and select someone you trust, such as a close relative or friend, to serve as an executor to administer it. In case you should pass while they’re still a minor, designate a good friend or relative to be your child’s legal guardian, if needed, so you can rest assured they’d be in good hands. Also consider establishing a trust that will allow a trustee of your choice to manage your child’s inheritance until they become legal adults. An estate planner can help you navigate these and other important issues regarding your will.

Raising a child is a big responsibility, but with careful planning, you can provide a secure financial foundation they can build upon for the rest of their life.