Financial Checklist for Expectant Parents
Becoming a parent is one of life's biggest joys and responsibilities.
Congratulations! You are having a baby!
Becoming a parent is one of life's biggest joys and responsibilities. Once you find out you are having a baby, life quickly becomes very busy with preparations and planning for your little one. Your calendar will become full with everything from scheduling medical tests to signing up for childbirth classes and picking out a car seat.
Preparation you can’t afford to avoid!
A topic that many expectant parents are reluctant to discuss with their close family, friends, professionals or even each other, is money! How in God’s name are you going to pay for another person to live in your house and eat your black olives and 12 month old Manchego?
The Cost of Having a Baby
The average child, in 2018, will cost, out of pocket, ~$3,500 to deliver … and they are not even home yet. And the cost of raising a child from birth to 18 years is somewhere in the neighborhood of $350,000! If you enjoy splurging on your kid, taking vacations, weekend trips, nice clothes and going out to eat, it can quickly add up to $700,000. Now, take a deep breath. By implementing a plan, there won’t be any need to stress over baby related finances.
Pre-Pregnancy Planning
If you can, get started when you decide to start a family.
Assess Your Car.
Is it safe, dependable and can it accommodate a baby? A baby doesn’t require a SUV or a minivan, a decent sized sedan will do. Every 3 years, my wife and I take turns getting a car. I like to drive them to ~160,000 miles. When “baby making” enters the family discussion, the next car purchased should take baby into consideration. (We bought a Subaru Outback 2 years before our first son was born).
Assess Your Living Situation.
Get into a housing situation that is not likely to change for 3 to 5 years. If you are renting, get something big enough to accommodate your growing family. If you have a house, make sure the location is family-friendly. If you don’t have a garage or car port, think about how you are going to feel dragging a car seat through a cold rain storm.
Have Fun with your Partner.
You may think that things are not going to change for y’all. THEY WILL. You won’t be going out for late night dinners. You won’t be catching a last minute flight down to Miami. You won’t be tailgating with your college friends on Saturday’s— or at least not very often. So enjoy your baby-free freedom while you still can. Jenn and I hit Costa Rica, Belize and Hawaii in the two years leading up to becoming parents.
Save.
I recommend $20,000. But do what you can, while having fun.
First Trimester
Mom-to-be may be experiencing some morning sickness and be worn out from her pregnancy, but you should still prioritize:
Start a budget for the coming 40 weeks. Plan on a weekly/monthly schedule, how you will draw down and distribute your cash.
Get a will drawn up by a trusted estate lawyer.
Complete any house projects (non-baby related), that you’ve been putting off.
Review your health insurance. It will be important to have a doctor in network, at a hospital you trust and close by. Reviewing your health coverage will give you an idea of your out of pocket costs. Also, you may determine after reviewing your coverage from a parent perspective, you may want to change providers or plan at your next open enrollment.
Second Trimester
By now, you should know if you are having a boy or girl — or maybe you’re keeping it a surprise. Either way, you can start nesting in earnest!
Set up the nursery. Buy the bed, changing table, nursing chair, paint the walls and decorate.
Determine your maternity and paternity leave. And then talk to your boss or Human Resources. If you work at a small business, the quicker they know what is coming, the better they can prepare.
Review your company’s paid leave benefits. If that’s not an option, look into Short Term Disability benefits. Short Term Disability can cover you for a percentage of your compensation. If you are a dad, take a long hard look at paternity leave. The difference in women’s and men’s pay in the work force these days is actually statistically related to “moms” -v- men. Women with no kids, earn just as much as men. A key to potentially solving this, is having dad take paternity leave. It is a complicated topic, but worth consideration.
Borrow and bargain shop. This is something I wish I did with my first son. We wanted all new, the latest and greatest for our little one. We spent a lot and didn’t realize how quickly the first year goes by and how quickly he would grow out of things. Reach out to your network of friends, family and Facebook and see who has baby gear they're willing to sell or give to you. Cribs, changing stations, strollers and clothes for you and baby are great items to borrow.
Set up baby registry. Make sure and ask for all of the things that you really want and/or need. Check out the online lists like Amazon’s Baby Registry. It offers almost everything, and is convenient and easy for family and friends that don’t live close by. Be thoughtful about compiling your list. And also be cognizant of the size of the shower, when setting your wish list.
Explore Child Care. Will one parent stay home? If not, tour day care facilities and/or interview nannies and ask friends for recommendations.
Third Trimester
Finalize Child Care. Make sure day care applications are complete and starting dates are set or get a commitment from your nanny.
Stock pile baby supplies. Be savvy, get to know prices and buy diapers, wipes, food, clothes when they go on sale.
Pack your Hospital Bag: At 36 or 37 weeks, pack your hospital bag and install your baby’s car seat, just in case you go into labor early. Here’s a great list of what to pack.
Schedule a newborn photoshoot (with an affordable photographer). You’ll treasure those photos forever. **Yes, that is my son in the top pic. Isn’t he cute?
FOCUS ON BABY!!
How a Financial Planner Can Help
Becoming a parent is both exhilarating and overwhelming. You want to provide your baby with a safe, secure and loving home. Having a sound financial plan can help you provide that security for your family:
Estimating your medical costs
Planning leave from your job
Budgeting for your new arrival
Estate planning - will or trust
Life and Disability guidance
14 Questions to Ask a Financial Planner
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The Financial Mistake You Don't Realize You Are Making?
I was talking with a family friend, who’s retired, about how she was managing her affairs. She felt confident that all was well. She and her husband had recently updated their will. I nodded with approval,
I was talking with a family friend, who’s retired, about how she was managing her affairs. She felt confident that all was well. She and her husband had recently updated their will. I nodded with approval, as its always a wise move to have your will reevaluated every so often. I’m curious (nosy) and try to be helpful, so I asked her more questions. After I asked about her stock/bond/cash allocations, we moved on to insurance. I asked about long term care, in case circumstances changed and they needed assisted living. She got real quiet and then all of a sudden blew up in frustration …
“I didn’t think to ask about that but WHY DIDN’T THE LAWYER??!! I’m calling him tomorrow!”
It’s a common revelation to people I meet with: On your own, you’ve engaged with several specialists but don’t have a financial advisor with a holistic view of your entire financial health to make sure everything is covered. Similar to a primary care physician who sees you on a regular basis and advises when to see a trusted specialist. Or a systems architect in software, who understands how the myriad components of a system interact.
You may have someone for stocks and bonds, a medicare guru, an estate lawyer, a real estate lawyer and an insurance agent … but do you have anybody that has the overall holistic view of your plan, tying everything together? Someone who’s family’s future, is directly tied to your family’s future success?
At Chamberlain Financial Advisors, we assess all aspects of your situation, providing solid advice throughout. We are fee-only, meaning we don’t get commissions to sell you products. Where we need experts, I facilitate the conversation. The ultimate goal is your overall financial health.
Do you have an advocate with a holistic view of your family’s financial situation? Are you DIY’ing it, but don’t really understand all aspects of the plan? Set up some time with Josh. Let’s get fully healthy.
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To stay healthy we pay ~$150/month for Crossfit or Yoga. Now you can have your own personal advisor working with you to ensure you meet your financial health goals, for less than your monthly health studio membership.
A recurring theme keeps coming up in conversations with potential clients... the idea that they "don't have enough dough" to "deserve" a financial advisor because they don't have significant investable assets lying around.
This notion, incidentally, is perpetuated by many advisors that won't talk to anyone with assets under $500,000! Because apparently their time/overhead is worth more than $5,000/client/year?
I became a financial advisor because of my love of investing and finance and my passion for helping others reach a place where cash is not the primary variable in determining a family’s long term decisions. It is important to me that my services are affordable and accessible so that I can build trustworthy and lasting relationships with as many people who could benefit from my help. To do all these things I have put together a win-win solution for those who don't have a boatload of assets -- yet.
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We will develop a regular cadence for meetings, virtual or in person, around your schedule. We will work on budgeting, investing, insurance (I’ve got a guy you can work with), saving for a house/boat/college expenses, annual company elections and anything else you may have on your mind. And as we work together, we will build a lasting relationship of trust.
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Can you afford to put off this decision any longer? Do right by you and your family and start investing in your future. Schedule a call to discuss how, for less than your monthly cable bill, we can start building your wealth and reach financial freedom.
(**And Jenn and I love our fitness routines!! We love y’all @crossfitdecatur and @purebarredecatur.)
