Having and raising a baby is expensive. I chatted with a financial planner (my mom!) for some expert recommendations on how to plan for this life change. If you already have kids, it is never too late to start taking steps for a more secure financial future. As someone who has very limited knowledge about financial best-practices, getting a big-picture look at our finances and discussing our financial goals with an expert was incredibly helpful.

Before Baby:

1. Meet with a financial planner

Regardless of where you are in your financial journey, meeting with a financial planner is a great place to start, and can help you create a plan tailored to your family’s goals.

2. Plan for retirement

While retirement may seem so far off, set aside a percentage of your income for retirement NOW. Take advantage of any employer match on your 401(k) if your workplace offers one.

3. Prepare for tighter budget

Your income might change after having a child. For example, parental leave may or may not be paid, may be paid at a lower rate, or one parent may decide to stop working after the baby comes. Make sure this tighter budget will work with current expenses, or even practice living off this lower amount for a few months prior to baby arriving. 

4. Set aside an emergency fund

Aim to save enough to replace several months of income.

5. Pay off debts

At the recommendation of our planner, before welcoming our baby we worked really hard to pay off student loans and one car. Getting rid of these monthly payments really helped to offset the cost of daycare payments when my leave ended.

6. Plan for the cost of delivery

I didn’t expect our hospital bill to be so large for our delivery, especially since I work for a health insurance company and assumed I had great coverage. Our out-of-pocket hospital bills totaled about $3,000 for labor and delivery and was not something we were planning for.

After Baby:

1. Save for your baby’s future education with a 529 plan

This is a tax-advantaged savings plan designed to encourage saving for future education costs.

2.Take advantage of a dependent care FSA

This pre-tax account can used to pay for eligible dependent care services, such as preschool, summer day camp, before or after school programs, and child or adult daycare. You can currently contribute up to $5,000 annually to this account.

3. Cut expenses or increase income

Cutting down on expenses or increasing cash coming in are two basic principles to balancing a budget. Some ways to do this could include steps like:

• Compare what the cost of health insurance is on all parent plans. 
• Buy second hand. So much baby gear is only used for a brief period of time. Shopping secondhand for clothes, toys and other gear is a great way to save some cash.
• Find new ways to make money. I teach fitness classes a few times a week in addition to my full-time corporate job. We set aside this extra money and use it for special larger purchases or vacation.
• Ask for a raise or find a better-paying job.
• Downgrade or sell a car.
• Refinance your mortgage and/or consider refinancing student loans.
• Consolidate and compare shops for your homeowners and auto insurance.
• Eliminate unnecessary monthly subscriptions, such as streaming services or unused gym memberships.

What other budgeting tips does your family use?