New Baby on the Way? The 8 Financial Steps You Should Take to Prepare
Congratulations! Now get busy. From health insurance to car seats, here's what expectant parents should do to get ready for their new arrival.


As you prepare to welcome a baby into the world, the excitement and anticipation of meeting your child for the first time can be overwhelming. Although you have nine months to prepare, it probably feels like there just isn’t enough time to get everything done.
I have three young children at home, and I have learned quite a bit about how babies change your life, and your finances. Things that I thought would be difficult — like sleeping and changing 20 diapers a day — weren’t. And things that I thought would be easy — finding time to eat or take a decent shower — were more challenging than I imagined. To help you get ready for this exciting (and chaotic) period of your life, I have identified some important steps you’ll want to take as you prepare to welcome your new child into the family.
1. Understand your employer’s maternity and paternity leave policies
Review your company’s leave policies, and verify if they provide paid time off, and if they do, what percentage of salary is paid. Confirm how much time your employer will allow you to take, including unpaid leave, sick days and vacation days. Plan with your spouse who will take time off when, and if the time off will be together or separate. Your employer may not offer maternity leave, paid or unpaid. Factors can include the number of employees, the state of operation and their own policies. Talk with your human resources representative to make sure you understand your options.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
2. Review life insurance
Review your life insurance policies and ensure you have updated beneficiaries and sufficient coverage. Common life insurance goals include education spending, debt elimination and salary replacement. Consider increasing your coverage to protect against any loss of lifestyle in the event of an early death, especially if one parent plans to exit the workforce.
3. Ensure that you add your baby to your health insurance within 30 days of birth.
Review both spouses’ health insurance (if applicable) and make sure your baby is added to your preferred policy. Understand your coverage for deductibles, pharmacy and medical co-pays, vaccination schedules and pediatric appointments. Your baby will require frequent visits to the pediatrician, especially in the first year. To ensure that you’re comfortable with the baby’s care, get a referral from your doctor, friends or family. If possible, select a pediatrician in your provider’s network to get the best coverage.
4. Review estate documents
If you don’t have your estate documents in place, now is the time to draft and execute them. Your legal documents should include a will with guardianship directives, a living will (medical directive) and a financial and medical power of attorney. If you have trust documents in place, review them to ensure beneficiaries are up to date. When reviewed and executed, these documents should be stored in a safe place, as should your baby’s Social Security card, birth certificate and health records. And remember to send copies of your estate documents to your executors for their records.
5. Consider big purchases
A growing family often brings the need for a larger home and a bigger vehicle. Plan for these expenses and implement a savings strategy as soon as you can. This will allow you to get a better feel for your budget, and will allow you more time to save and shop around for solutions that fit your needs. Whether you are buying a new house or not, you will need to do some prep work, including baby proofing, setting up changing stations, and selecting your bassinet/crib location. Research the big items on your baby registry, such as the baby monitor, car seat, stroller and crib — these are items you’ll want to get right the first time. Baby item checklists can be found on websites like TheBump.com or Pinterest.
6. Construct a budget
Prepare for the outflow of cash you will experience now and down the road so you won’t be caught off guard. According to the U.S. Department of Agriculture, the average cost of raising a child to age 17 was $233,610 in 2015. That figure includes housing, food and child care, but not college. Build in as much detail as you can, including recurring items like diapers, clothes, wipes, lotion, soaps and activities (did you know your baby can be enrolled in swim lessons at 6 months?). It’s also important to determine how child care will factor into your budget. According to Care.com, the average cost of center-based day care for toddlers is about $9,733, but prices can range from $8,043 to $18,815 a year — and nannies are even more expensive at $27,019 to $32,677 a year. Even if one parent plans to stay home, there will still be the potential impact of lost wages and benefits.
7. Establish or increase an emergency fund
Most experts would agree that three to six months of essential living expenses should be saved in an emergency fund; however, many couples are more comfortable with 6 to 12 months stashed away. Set aside a comfortable amount that will accommodate a growing family.
8. Consider savings for your baby’s future
According to the College Board, a moderate budget for an in-state public college in 2017-2018 averaged $25,290, and a moderate budget at a private college averaged $50,900. These figures include tuition, housing, meals, books and fees. With the recent tax law changes, 529 savings plans are now more flexible, and allow funds to be used for K-12 education costs as well as college. For parents looking for a tax-advantaged savings account not limited to education, they can set up a custodial account under the Uniform Transfers to Minors Act (UTMA) or the Uniform Gifts to Minors Act (UGMA). These types of accounts shield the minor from the tax consequences of the assets up to a specified value, until the child reaches legal age. I recommend identifying milestones you’d like to help your child with in the future, and set a monthly savings goal to support your intentions. Choose investments with a risk level appropriate with the goal time horizon.
Planning to bring a child into the world can present a host of new challenges, but tackling each, one by one, can help ease the burden once your baby arrives. And for all my fellow parents out there, remember that these first nine months are just the tip of the iceberg — they represent the beginning of a lifetime’s worth of financial decisions. Once you start to get a handle on things, it’s time to start planning for the years ahead — or at least the next 20.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Matt Helfrich is President of Waldron Private Wealth, a boutique wealth management firm located just outside Pittsburgh, Pa. He leads Waldron's strategic vision, brand and value proposition and overall culture of the firm. Since 2002, Helfrich has served in a number of roles including: Chief Investment Strategist and Chief Investment Officer, where he was instrumental in creating and refining Waldron's investment discipline.
-
Five Medicare Changes Coming in 2026
Learn about the benefits that become permanent features of Medicare in 2026 and how they have been changed or updated since their inception.
-
Discover Which Five States Have AAA Offices Offering Real ID Services. Learn What You Need To Do To Take Advantage of Them.
A trip to the DMV can be a painful experience. Skip the line and visit your AAA office to get your REAL ID (select states only).
-
Four Tips for Mastering a Financial Security Mindset
This financial professional's mom helped him learn that financial security is more than making money — it's about cultivating a mindset that will help you stick to an investment plan even when times get tough.
-
Lessons to Be Learned From a $1 Billion Divorce
An estate planning attorney notes that an oil executive’s billion-dollar divorce could have turned out very differently if the couple had a premarital agreement and the executive had used asset protection trusts.
-
Four Ways to Use Your Tax Return as a Financial Planning Tool
Rather than filing away your paperwork and forgetting about it, this CPA recommends using it as a source of insight to optimize your long-term financial strategy.
-
How Women Can Turn a Gray Divorce Into a Financial Win
Getting divorced later in life can be a big financial blow, especially for women. But, as this financial adviser points out, it can also serve as a positive turning point for growth and independence.
-
Private Markets: Six Things Investors Can Learn From BlackRock's CEO
BlackRock's chief executive, Larry Fink, recently argued the case for increased access to private markets. Here's how a financial professional sees Fink's views translating into action for accredited investors.
-
I Found Out What It Takes for a Family Business to Thrive
A handy book and my chat with the chairman of Community Coffee offer some guidance on making your family business a success.
-
The Future of Opportunity Zones: Outlook for 2025 and Beyond
There are three potential paths forward for this innovative tax incentive program that's set to expire in 2026.
-
How Private Equity in Your Portfolio Could Boost Returns
And reduce volatility. A few decades ago, private equity was considered a 'cottage industry.' Now, it is a multitrillion-dollar asset class.