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Financial Steps To Take When You Have A Baby

By Ross Biesinger

Cypress Wealth Services

Congratulations! You just found out you’re going to be a parent, and you’ve experienced every emotion imaginable these past few weeks—excitement, shock, fear, amazement, anxiety—just to name a few! And now you’re second-guessing if you’re financially prepared for this. 

Did you know that most parents spend around $233,610 on child costs from birth to age 17? It’s clear raising a child is expensive, but the good news is that there are simple steps you can take now to financially prepare for your little bundle of joy. Acting on these steps before your baby arrives means you can spend more time basking in newborn bliss and less time worrying about your finances.

Reevaluate Your Budget

List out any financial changes that may happen once the baby arrives. Will one parent choose to stay home for the first year? Will part of your maternity leave be unpaid? There are normal costs of raising a child you can plan for, such as day care, clothes, and baby gear, but plan (and save) for the unexpected, perhaps a delivery that doesn’t go as intended, higher utility bills, or loss of income. 

If the amount in your current emergency fund makes you a little queasy, save more now. As your family grows, you’ll feel more comfortable having that added cushion to fall back on. When preparing for a baby, save as much as you need to have peace of mind.

Adjust Health Insurance

While things are calm, review your health insurance coverage. When looking over your policy, evaluate the cost of:

  • Adding your baby to your insurance plan
  • Any changes to premiums, deductibles, and copayments
  • Extra doctors’ visits for prenatal care, childbirth, and post-delivery checkups

If both spouses have employer-sponsored health insurance plans, compare the costs of having your baby on either plan and decide what works best for your family. In the beginning, you’ll worry about every little cough or sneeze your baby makes, so account for those unexpected trips to the pediatrician or urgent care as well. 

Save For Your Child’s Future

Let’s look at the average cost of college tuition, fees, and room and board for the 2018-2019 school year:

  • $21,370 for a public in-state four-year college
  • $37,430 for a public out-of-state four-year college
  • $48,510 for a private four-year college

As you can see, college can be brutally expensive. Starting a college fund for your child as soon as possible will help you avoid being blindsided. Even if you can only save small amounts, it can quickly add up with the help of compound interest and time. If you’re unsure about which college fund may be right for you, seek guidance from a financial advisor. 

Review Life Insurance & Will

Take a look at your current life insurance policy and increase the coverage if needed. The amount of your current policy should factor in the number of years you want your income to replace, current debts, and funeral costs. Now that you have a dependent, you’ll also want to account for child-related expenses like college costs. 

If you haven’t already created a will, now is the time to do so. A will ensures your child is taken care of in the event something happens to both you and your spouse. Yes, it protects your assets, but it also outlines a plan of care for your child. 

Your First Step

Having a baby is a scary, exciting adventure that’ll change your life forever. At Cypress Wealth Services, our goal is to help you be as financially prepared as possible for this exhilarating time in your life. No matter what questions you may have, we want to help you leave a lasting legacy for your children. To get started, call our office today at 866.888.6563 or contact one of our offices today.

About Cypress Wealth Services 

Cypress Wealth Services is an independent RIA firm providing financial planning and investment management to high net worth individuals, families, business owners, and institutions. Cypress Wealth Services is comprised of professionals with diverse backgrounds and extensive experience and qualifications. Cypress Wealth Services is uniquely qualified to serve a broad range of client needs. Their experience and expertise act as a foundation for their client service process, The firm uses The Second Growth, which focuses on efficiently protecting, growing, and transferring to their loved ones the wealth and legacy a person has already built. With offices in Palm Desert, CA, Tustin, CA and Anchorage, AK, the firm serves clients across the country in Wealth Management Services, Fiduciary Services, 401(k) Design and Management, Investment Reporting Services, Financial and Retirement Planning and more. For more information: visit or call 760.834.7250.