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Having a Baby? 8 Financial Decisions To Make Over the Next Nine Months

Bringing a baby into the world can be exhilarating, and the anticipation of change can often be overwhelming for new parents. Suddenly, nine months feels like the blink of an eye when it comes to preparing for the expansion of your family. Not only will your life change overall, but the details of your finances and everyday nuances will suddenly change drastically. 

To help you prepare for this exciting time, we’ve identified a few important steps to take as you welcome your new child into the world. 

pregnant couple financial planning

1. Clarify Your Employer’s Maternity and/or Paternity Policies

It’s important to begin your planning process by reviewing your company’s leave policies and determining whether they provide paid time off for you and/or your spouse. You’ll also want to confirm how much time you’ll be allowed to take, from unpaid leave to sick days and vacation days. 

If you’re in a partnership, outline a plan for who will take time off, when, and if that time will be taken together or separately. If your employer does not offer paid or unpaid maternity leave, speak with your human resources representative to ensure you understand your options. 

2. Assess Your Life Insurance Policy

As a new parent, you’ll want to review your life insurance policy or policies to ensure that your beneficiaries are up-to-date and that you have sufficient coverage. You may also want to assess other goals related to education spending, eliminating debt, and salary changes. 

Circumstances may warrant you to consider increasing your coverage to offer protection against any loss of lifestyle in the event of early death, especially if one parent plans to leave the workforce. 

3. Insure Your Baby’s Health

Within 30 days of your child’s birth, review both parents' health insurance (if applicable) and make sure your baby is added to your preferred policy. Consider and clarify your coverage for deductibles, co-pays, vaccination schedules, and appointments, as your baby will require frequent visits to the pediatrician, especially during the first year. 

It’s very important that you’re comfortable with your child’s care. A referral from your doctor, friends, or family is more likely to make you feel at ease. Selecting a pediatrician in your provider’s network is recommended to receive the best coverage. 

4. Review Estate Documents

There’s no better time to organize your estate documents than in preparation for a new family member. Drafting and executing your legal documents should include directives for guardianship, a living will, and financial and medical power of attorney. 

You may currently have trust documents in place, so it’s important to review them to ensure your beneficiaries are up-to-date. Once reviewed and executed, these documents should be safely stored along with your baby’s Social Security card, birth certificate, and health records. Lastly, remember to send copies of your estate documents to your executors to have on record. 

5. Consider Substantial Purchases

A growing family often means needing a larger home, vehicle or other big purchases. Planning these expenses and implementing a savings strategy can help ease associated financial concerns. Feeling more confident in your budget will allow you more time to explore solutions that ultimately fit your family’s needs. 

You may not be purchasing a new home, but with a new baby, you must prepare by baby-proofing, designating changing stations, and selecting the location of your bassinet or crib. Consider the larger items on your registry, including car seats, strollers, baby monitors, and cribs, as these will be the items you’ll want to have in place before the baby comes. 

6. Construct a Budget

Having a budget is always a great idea for meeting certain financial and lifestyle goals. Preparing for the outflow of cash you will undoubtedly experience now and in the future will help you avoid being caught off guard or surprised. 

According to the U.S. Department of Agriculture’s most recent data, the average cost to raise a child until age 17 was $233,610 in 2015. This includes the cost of housing, food, and childcare but not a college education. Incorporating as much detail as possible into your budget, including recurring items such as diapers, wipes, clothing, lotion, soaps, and activities, will help you prepare for the big-ticket items later on. 

Childcare is another important component that should be factored into your budget. According to, the average weekly cost of daycare for toddlers is approximately $211, but prices can often range. Nannies can be even more costly at roughly $596 per week.2 Keep in mind that if even one parent plans on staying home after your child is born, the potential impact of lost wages and benefits exists. 

7. Establish an Emergency Fund

If you have not established an emergency fund, now is a great time to ensure your family is prepared for the unexpected. Many would agree that three to six months of essential living expenses should be saved in an emergency fund. However, many families are more comfortable with having six to twelve months prepared. Consider your current spending habits and set aside a comfortable amount to accommodate your newly growing family. 

8. Consider Your Baby’s Savings

When it comes to saving for your child’s future, several details must be considered. Education can often be one of the looming costs, and according to the College Board, a moderate budget for an in-state public college in 2019-2020 averaged $26,590. In contrast, a moderate budget at a private college averaged $53,980.3 These include tuition, housing, meals, books as well as associated fees. Thankfully, 529 savings plans are now more flexible and allow funds to be used for K-12 education and college costs. 

For parents in search of a tax-advantaged savings account that isn’t limited to the costs of education, a custodial account can be set up under the Uniform Transfers to Minors Act (UTMA) or the Uniform Gifts to Minors Act (UGMA). These accounts protect the minor from tax consequences often associated with assets up to a specified value until the child reaches legal age.4 Identifying goals for your child moving forward will be helpful as you develop a monthly savings goal to support your intentions. 

While bringing a child into the world can present a number of new challenges, they can each be faced one by one to help ease any burden once your baby arrives. From the first nine months to the rest of their lifetime, there are endless financial decisions to be made so that your family can find success and happiness. 

Invest In a Life You Love,

Donovan Carson - founder of Carson Capital



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