Financial Steps to Consider Before Having Kids

It goes without saying that starting and growing a family can be both an extremely exciting and stressful time of life. To help make it a more manageable journey, at least from a financial standpoint, review this checklist on some key financial items to accomplish in preparation for the growth of your family. And don’t worry if you already have kids! These are all great things to review on an ongoing basis.

1) Talk through your goals and values with your partner

While it may seem obvious, many fly right past this critical first step. Before bringing a new life into the mix, it’s imperative to thoroughly hash out all of your values and goals for the future with your partner. What do you hope to accomplish? What aspects of life are most valuable to you? What is your picture of an ideal life? What do you agree on? What do you disagree on? How do you hope to raise a child?

Having this, often-times challenging, conversation will make all of the following items drastically easier to navigate together. Keep in mind that many people are shaped primarily by their own upbringing. This is especially true when it comes to raising children and managing finances. There will most certainly be differences here. Acknowledge and respect them.

2) Draw up and organize any legal documents

Creating a will is one of the most basic and necessary pieces of family planning. An attorney will be able to walk you through this process so that it aligns with your unique desires. Of course, this will likely be adjusted throughout your life. Nonetheless, it’s a good idea to get one in place in the early stages of a family.

3) Get an appropriate amount of life insurance

Insurance can become more important now than ever. A complete financial plan should account for the unexpected. You’ll want to be sure that, should something unforeseen occur, your loved ones are still able to live out the ideal life you’ve established in Step One. While different advisors may have their own methods for arriving at the “right” amount of coverage to have, you need to be very intentional in determining what you’d like the policy to achieve in the event it pays out. It’s a good idea for it to at a minimum cover any debts you may have and replace the income you produce as a means to support your family’s lifestyle. Additionally, some may want it to cover education expenses for children along with any final expenses and more. It’s a good idea to also review health insurance and disability income policies as part of your protection planning.

4) Establish a detailed budget

Even if you already have a solid budget, it will need updating. According to the U.S. Department of Agriculture: middle-income, married-couple parents with a child born in 2015 could expect to spend $233,610 to raise that child to the age of 171. The figure doesn’t even account for college! You can expect that some expenses such as utilities and food will increase, while brand new expenses like child care and school tuition will enter the picture. Really take some time to draw up a detailed budget in order to minimize surprises.

5) Juice up the emergency fund

With dependents in the mix, it’s a good rule of thumb to have at least 6 months of expenses stashed away in a savings account. If you’re not at this level yet, build it into your regular monthly savings as an automated transfer, like a bill, to contribute until you get there.

6) Determine if you’d like to save for college and/or other future expenses

Mapping out how you’d like to save for your child’s long-term future before they’re born will be a much less stressful approach than doing so after. As you learn about and weigh out the various options, the key questions to ask yourself are, “What would you like the funds to specifically be used for? And when?” There are plans specifically designed to be used for higher education expenses and others that provide a great degree of flexibility. Being sure of your values and goals will help simplify this process. Just like contributing to an emergency fund, it’s recommended to build this type of savings into your budget as well.

7) Keep your retirement savings a priority

You’re not doing your future kids any favors if they’re going to have to help supplement your retirement income one day. While much of your financial picture will shift as the family expands, do everything in your power to keep a focus on your own long-term savings. Use the time before you start having kids to consolidate any old retirement accounts if need be. Make a concerted effort to understand any plans offered to you through your employer and other options that may be available.

8) Seek out the guidance of an advisor

Your situation, desires, and values are all highly unique, while these steps above are generalized. A quality financial advisor may help you navigate these and many other decisions you’ll likely encounter. As you search for the right professional, be steadfast and look for someone who will truly be a good fit.

If you have dreams for your family, consider taking these steps before your first bundle of joy takes theirs.

Edward F. Jurgielewicz III


1Mark Lino, “The Cost of Raising a Child,” U.S. Department of Agriculture, Feb. 18, 2020.

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