Evaluate your safety net. Make sure you have enough life insurance to adequately provide for your child's upbringing and education in the event you or your spouse die prematurely. Likewise, make sure you have adequate disability insurance to provide an income if you're unable to work due to illness or injury. Equally important, read the fine print in your health insurance policy to check what is and isn't covered, as well as the caps for lifetime benefits and for certain procedures.

Write or update your will. If you die without a will, your money and possessions will be distributed according to state law, not necessarily according to your wishes. And it's not safe to assume everything will go to your spouse. For example, in many states your assets are divided among your spouse and your children, even if your children are minors, with restrictions on how the children’s share can be spent. Even worse, a court could end up choosing a guardian for your children.

Take advantage of the new child tax credit. Starting in 1998, you can claim a federal tax credit of $400 per child, per year, for your qualifying dependent children under age 17. In 1999, the credit increases to $500. If you’re married and file jointly, the credit begins to phase out if your modified adjusted gross income exceeds $110,000. If you’re a single filer, the credit begins to phase out at $75,000. The credit is reduced by $50 for each $1000, or fraction thereof, of modified gross income above the thresholds. Therefore, the level at which the credit is completely phased out depends on the number of qualifying children you have.

School yourself in the basics of college funding. No matter how old your child is, it pays to save before those tuition bills come due. But carefully consider the options. For example, before you put money in your child's name as a tax-saving move, note that your contributions to a custodial account are irrevocable gifts. That means at the age at which custodianships end, typically 18 or 21 depending on your state law, your child is free to spend the money as he or she pleases. What's more, since children are expected to contribute a far higher percentage of their income and savings toward college expenses than parents are, you may be limiting the needs-based financial aid your child may eventually be eligible for .

Teach your children about money. Help your children become regular savers and responsible borrowers so they'll be prepared when they're out on their own. Give them a weekly allowance, help them open a credit union savings account, and provide opportunities for them to earn extra money by doing household chores above their regular responsibilities. Also consider helping financially responsible teens get their own share draft/checking account and perhaps a low-limit credit card.