October 28th, 2015 | Nicole Miller

Baby-Proofing your financial life

We welcomed a beautiful little girl to our family earlier this year. She is an absolute joy in our lives! We experience the usual new parent learning curve though. Be sure to use your nine months to prepare your financials as well as the nursery. Here is some Mommy advice:

  • We had no idea babies needed all of this equipment! The recommended registry lists from stores were overwhelming. What is the difference between receiving a blanket, a swaddle blanket, and a stroller blanket? Remember there is a difference between what you think you need and what you actually use once the little one arrives. Trust other moms’ advice about what you really need and will use over the baby store recommendations. For example I found the perfect, expensive baby carrier after trying a number of them on. I knew I was prepared for the two of us to be mobile together. Our little girl screamed as soon as she saw me put this carrier on, let alone when I put her in it! I had to buy yet another one for us to finally use.
  • Evaluate your budget—play with the numbers and spend some time estimating how a baby will impact your spending patterns. Diapers, wipes, clothes, childcare and possibly formula are all ongoing costs that will be new to your budget. I am still amazed at how many diapers and wipes we go through!
  • Look further into the future as well to see how your budget might change over the years. College costs are increasing substantially each year and creating a savings plan using a 529 Plan can be a great way to address these costs over time. And if you don’t have a family budget yet, now is a great time to start one!
  • Having access to a sufficient emergency reserves becomes an even higher priority as your budget increases with a new family member. I often recommend saving between three and twelve month’s worth of living expenses for those unplanned situations.

Other important to dos include reviewing and updating your estate plan including naming a legal guardian if something happened to both parents, any beneficiary designations, health or dependent care documents, as well as looking at life insurance options.

Nine months seems like a long time to prepare for your little one, but those months started to feel like nine weeks when I was so tired during my pregnancy. And once baby is by your side, get ready for the real fun to start!