A Step-By-Step Guide
Congratulations! You or your kids (or grandkids) are expecting a baby. Just like that, life changes as preparations are made and plans are laid. We know the joys of parenthood are bountiful, even as the challenges multiply.
Believe it or not, there’s a financial planning piece of the new-child puzzle, and Adviser Investments is here to help. We hope that if you’re a new or expecting parent, you’ll find time to give this a read and start planning, or if you’re a new or expecting grandparent that you’ll share this with your family.
This checklist is drawn from our 25 years of experience advising clients through all stages of their financial lives. It’s a step-by-step planner designed to help you and your family navigate at least some of the financial obligations of parenthood.
Before Growing Your Family
The best time to begin financial planning for a new child is before they arrive. However, it’s never too late to get started.
After Birth or Adoption
Once you have your new child’s name and other identifying information in hand, you can put your plans for their future into action.
Budgeting Tips for a New Baby
It’s estimated that in their first year, a baby will add between $10,000 and $25,000 in one-time and ongoing expenses for the average American family. The table below breaks down some of the major categories of spending for budgeting purposes. Note that these figures can swing widely based on where you live, your current circumstances and how you choose to spend.
To help offset some of the estimated costs in the table (which assumes you buy everything new):
- Put must-have items on your baby-shower registry.
- Join community parents’ groups to hear about deals and hand-me-down offers.
- Try to buy secondhand or get reusable items for free from friends, family or consignment shops. (Note that the American Association of Pediatrics recommends buying car seats new.)
- If your company offers a health savings account (HSA) or flexible spending account (FSA), you can save money tax-free for qualifying health and child care costs.
Resources
- Cost Calculators. Try out some online calculators to get a better idea of what it will cost you to raise a child. We like the ones on NerdWallet and BabyCenter.
- What-to-Buy Lists. You can find a wealth of articles and lists available online to help you figure out what to get for a new child, but the BabyCenter and What to Expect websites are two places to start. We recommend doing your own research or asking your friends or family for advice on what’s essential before buying big-ticket items, then building your own lists of needs and wants from there.
- Budget Trackers. Aside from the Adviser Investments Detailed Budget Worksheet, our online client portal, Adviser Insights, can be linked to your financial accounts to help you easily track your spending and savings. Mint and Quicken provide similar online budgeting tools.
- Adviser Investments. If you have questions on how much insurance coverage you need, getting started with an education savings plan or about creating your budget, please call us at (800) 492-6868 or email us at info@adviserinvestments.com to see how one of our financial planners may be able to help you.
This material is distributed for informational purposes only; and is not financial or investment advice. Speak to your financial adviser before taking specific action. Our statements and opinions are subject to change without notice. Adviser Investments, LLC has no relationship with NerdWallet, BabyCenter, What to Expect, Mint or Quicken. These resources are referenced solely for your convenience. We do not guarantee your satisfaction or that a particular product or service will be suitable for your specific needs.
Tax, legal and insurance information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice, or as advice on whether to buy or surrender any insurance products. Personalized tax advice and tax return preparation is available through a separate, written engagement agreement with Adviser Investments Tax Solutions. We do not provide legal advice, nor sell insurance products. Always consult a licensed attorney, tax professional, or licensed insurance professional regarding your specific legal or tax situation, or insurance needs.
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