Smart money moves for families
Raising a family can be wonderful, but it can also be stressful . A majority of parents say they are hopeful about the future, but only 36% say they are thriving.1 It’s expensive to have kids. The estimated cost to raise one child to age 17 is more than $310,000.2 Luckily, a sound financial strategy may help ease some of the stress of parenthood. You have questions, and we have answers to help put you and your family on a path to financial confidence.
How do I start planning for my family financially?
Take baby steps. Come up with a written plan. You can begin with a simple budget, and then start to think about things like short-term and long-term savings goals, insurance coverage, investments, and an estate plan. When you’re ready, you can talk to a professional about taxes. Having kids may mean you get dependent tax breaks, which could help your financial situation.
What if our children get sick or injured?
New parents often worry about their child’s health and their ability to afford health care. Parents have one month from the time their baby is born, or adopted, to add them to their health insurance policy. Miss this important deadline and you’ll likely have to wait until the next open enrollment period. Don’t forget, once your baby is born, he or she has their own deductible. You may “max out” the deductible on mom during the baby’s delivery, but then if your baby needs extra care for some reason, you may incur additional expenses.
When securing coverage for your infant, it’s important to mind the “birthday rule.” This regulation, set by the National Association of Insurance Commissioners, states that if both parents have employer-sponsored insurance, the child must be covered under the plan of the parent whose birthday comes first in the calendar year. The other parent's insurance is considered secondary.3 The plan of the parent with the earlier birthday will determine the deductible and coverage, but you'll also want to assess how much you'll need to save for potential out-of-pocket medical costs.
As your children grow, their health insurance can help pay for costs associated with illnesses and injuries. However, if the illness or injury is severe, the medical bills can become overwhelming. Children’s hospitals recognize this financial burden, and some have started supporting patients' families with assistance programs.4 If your child gets injured while playing a sport, schools and youth organizations often carry supplemental accident insurance that can help cover expenses.5
How do we pay for child care?
Child care is one of the largest expenses families face, often rivaling housing costs. The average cost of daycare for one child in the US is north of $16,000 annually, while hiring a nanny can cost more than $43,000 per year.6 To manage these costs, parents can explore strategies such as dependent care flexible spending accounts (FSAs), which allow pre-tax dollars to be set aside for child care, and child and dependent care tax credits, which can offset a portion of expenses. Additionally, some employers offer child care subsidies or on-site care, and families may qualify for state or federal assistance programs.7 Planning ahead and leveraging these resources can help reduce the financial strain of this essential expense.
What if we get sick or aren’t there to take care of them?
Disability insurance and life insurance can help protect your family if you’re no longer able to financially care for them. However, it’s important to know what you have and if you need more.
Stay-at-home parents should also consider life insurance. In 2025, the value of stay-at-home parents’ work was estimated at $145,235.8 If something happens to a stay-at-home parent, would you be able to afford full-time care and other help to replace all the tasks they handle?
What if we get blindsided by an unexpected expense?
Unexpected expenses can be common when raising kids. A family member may have offered to provide child care, then circumstances changed and you needed to pay for a licensed provider. Or maybe you planned to nurse your baby exclusively, but then decided to use formula instead. To prepare for the unexpected, families should have enough savings to cover six months of expenses at a minimum, but ideally, it’s recommend to have savings equivalent to a year’s worth of your income.9
What if we can’t afford college?
If you plan in advance, you can start saving for college while your kids are still young. Using a savings plan like a 529 can be a great strategy, and asking grandparents to contribute to educational goals can also be a good idea. While you can always borrow for college, you can’t borrow for retirement. If you’re getting near retirement age, focus on funding your retirement first, then save for college. A financial professional can help determine a suitable plan of action to fulfill your retirement and your child’s future.
What if both parents pass away?
It may be difficult to think about, but it’s also important to complete an estate plan and write a will that legally designates a formal guardian and a fiduciary for your children. In the unlikely event that both parents pass away, you want to be the one deciding who should raise your children, not a state court. While a guardian is responsible for providing food, shelter, clothing, health care, and education to a minor, they’re entitled to reimbursement of the costs. A fiduciary (such as a trustee or guardian of the property) is appointed to manage a child’s property and must distribute it for the minor’s support. You can designate the same person or different people to be your child’s guardian and/or the property fiduciary. You should also consider creating a trust for your children to ensure sufficient funds throughout their guardianship.
Since the primary duty of your children’s guardian is to act as a surrogate parent, it’s important that they not only have the financial means to raise a child, but also share an emotional bond.
Life with children is a rollercoaster ride. I can help you navigate all your investments and expenses, from budgeting for your children’s basic expenses to creating their college fund. A sound financial strategy can help put your nerves at ease — so you can treasure every moment and enjoy watching your children grow up.
Disclaimer:
1 Colyn Ritter, Survey Finds Parents More Hopeful, Satisfied Than Those Without Children, Ed Choice, May 10, 2023
2 Tim Parker, How Much Does It Cost to Raise a Child in the U.S.?, Investopedia, January 22, 2025
3 Louise Norris, What Is the Health Insurance Birthday Rule?, VeryWell Health, October 21, 2025
4 Grant Heiman and Brian Busenbark, 3 Non-Traditional Ways to Support Families Financially, Children’s Hospital Association, January 30, 2023
5 Lea Keller, Who pays for high school sports injuries?, Lewis and Keller, May 23, 2025
6 Sheri Reed, This is how much child care costs in 2025, Care.com, January 29, 2025
7 Marc Guberti, Average Cost of Childcare in the U.S. [2025]: By Care Type and State, Finance Buzz, October 28, 2025
8 Vance Cariaga, If Moms Got Paid for Their Tasks, They’d Earn $145K a Year, Study Says, GoBankingRates, May 11, 2025
9 Jonathan Ponciano, How to Set Financial Goals for Your Future, Investopedia, April 2, 2025
This material is intended for general public use. By providing this content, The Guardian Life Insurance Company of America, and their affiliates and subsidiaries are not undertaking to provide advice or recommendations for any specific individual or situation, or to otherwise act in a fiduciary capacity. Please contact a financial professional for guidance and information that is specific to your individual situation. Material discussed is meant for general informational purposes only and is not to be construed as tax, legal, medical, or financial advice. Guardian, its subsidiaries, agents, and employees do not provide tax, legal, medical, or finance advice. Consult your tax, legal, medical, or finance professional regarding your individual situation.
8665811.1 Exp. 12/27 *pre-approved content*
