6 money moves to make when growing your family
Becoming a parent is one of the most exciting times in your life! But let’s face it ... having kids is expensive and the costs continue to rise. You can expect to spend around $312,202 to care for a child through age 17.1 And that’s even before you start calculating college expenses!
From paying for diapers to saving for college, we know there’s a lot on your mind. More than one-quarter of married parents and 42% of single parents rate themselves as fair to poor when it comes to managing their finances.2 If you’re among the parents struggling with financial confidence, give yourself a head start by planning for your financial future now!
Here are a few tips to get you started.
Start simple and set a budget. We know you want to buy your baby the best of everything. And luckily, there are ways you can set up your budget to splurge on some things. The first step is to figure out how much you have coming in and how much you’re already spending. Consider what you can adjust to make up for any lost income due to parental leave if needed. Once you know where your money is going, you can start to make changes to free up some extra cash for the baby.
Create a long-term savings plan. The right budget empowers you to save for future expenses. So, make a plan for what you’ll use those savings for, whether it’s a down payment on a house or retirement. The earlier you start saving, the more time your money has to grow. To make sure you’re saving enough, try automating your savings by setting up a direct deposit from your paycheck to a savings account. Also, the time to start saving for college is now. It doesn’t have to be as daunting as it sounds — you can save while you spend. Many credit cards offer a certain percentage back on spending, those earnings then go directly into a 529 college savings account. You may not be using those points for travel for a little bit, anyway!
Plan for everything. Preparing for the future means putting yourself in the best position to handle whatever life throws your way. Life and disability insurance can be a great way to protect your family financially. The amount of life insurance you need depends on your individual circumstances, but most experts recommend a policy that covers at least 10 times your annual income.3 Once your baby is born, you should be able to change your benefits enrollment status and add baby to your life insurance plan. While you’re at it, add your little one to medical, dental, and anything else that applies.
If you become unable to work due to illness or injury, disability insurance can provide you with replacement income to support your growing family. This can really be a lifesaver if you’re a primary breadwinner with a young child.
Press pause on spending sprees. Take a gut check right before you hit the “buy” button. Can you buy the exact same product on a second-hand marketplace site? Is this something that pops up sometimes in your neighborhood’s Buy Nothing group? Can you ask a friend for a hand-me-down? Over time, the $20 savings here and there may help to ease the burden on your budget.
Give yourself a (tax) break! If your company offers a Flexible Spending Account (FSA) or a Health Savings Account (HSA), consider putting a bigger allowance in it prior to the birth of your child. Most FSAs and HSAs will cover deductibles and co-pays, as well as new medical expenses that can come with babies. Adding to an FSA or HSA lowers your taxable income.
Outsource your financial planning. It can be overwhelming to know that your growing family is depending on you to make smart money decisions, but it’s not something that you have to do yourself. Meet with me to get a monetary checkup and help with creating a plan that’s right for your family’s needs and goals. People who report having moderate financial health say working with a financial professional increased their confidence in their financial choices by 62%.4
We know there’s more to life than planning your finances. Here are a few other things you can do to prepare for parenthood.
Get your health in order. Your financial wellness is important — but so is your personal health! Before you have a baby, make sure you have adequate health insurance coverage for your growing family. And catch up on your own doctors’ appointments before you need to focus on baby’s!
Create a support system. Having a strong support system is essential for new parents. This could include your parents, friends, family, or a local parenting group.
Take some time for yourself. It’s important to get some me time before you have a baby. Go on vacation, spend time with friends, or throw yourself into a hobby or activity you enjoy.
Raising a child is a wonderful experience, but it’s expensive. If you take the time to prepare, you can make the transition a little bit smoother.
Disclaimer
1 Maryalene LaPonsie, How Much Does It Cost to Raise a Child?, U.S. News & World Report, May 9, 2024, https://money.usnews.com/money/personal-finance/articles/how-much-does-it-cost-to-raise-a-child
2 Guardian Workplace Benefits Study, 2025
3 Andrew Beattie, How much life insurance should you have?, Investopedia, September 23, 2024, https://www.investopedia.com/articles/pf/06/insureneeds.asp
4 Guardian’s 14th Annual Workplace Benefits Study, 2025
Material discussed is meant for general informational purposes only and is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice. Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation.
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