A New Child

Why Care?

The birth of a child fundamentally changes your financial obligations and the stakes of getting your financial foundation right.

The cost of raising a child from birth to 18 is estimated at $300,000+ in the U.S., not including college. Planning matters.

Life insurance goes from optional to urgent the moment a child arrives. If you earn income your family depends on, they need protection against the financial consequences of losing it.

Estate planning — specifically a will with guardian designations — is non-negotiable once you have a child. Without it, a court will decide who raises your child if something happens to you.

Childcare is frequently the largest single household expense for young families — often exceeding the mortgage. Planning for this cost before it arrives is far better than being surprised by it.

Get term life insurance before leaving the hospital if you don't already have it. A 20-year level term policy for a young, healthy parent is typically $20–$40/month.
Create or update your will with guardian designations immediately. Name who will raise your child if you and your partner are both gone.
Open a 529 plan as early as possible. Even $50–$100/month from birth compounds into a meaningful college fund.
Use available tax benefits: the Child Tax Credit, Dependent Care FSA (covers childcare pre-tax), and Earned Income Tax Credit can meaningfully reduce your tax burden.
Revisit your budget honestly. Childcare, diapers, formula, pediatric visits, and gear add up quickly. Build an honest estimate of new monthly expenses.
Don't let college savings crowd out retirement savings. Retirement comes first. You can borrow for college; you can't borrow for retirement.