Having Kids? Financial Items to Consider

Amber Kodad |

You found the spouse of your dreams and got married. So now what?! For some, the next step is to have kids. While having children can be the greatest gift ever received, it is important to remember that they are expensive (especially when you have two at the same time as I did)! Before you take the leap into parenting, review your budget, and determine how children will impact your finances. Below is a list of some of the things to start thinking about.

Medical Costs (Pre and Post Baby)

Did you know that the average cost in the U.S. for a new mother with insurance is $4,500 for labor and delivery (The Atlantic, 2020)? It is important to review your existing health insurance and find out what is covered and what you will have to pay out of pocket when it comes to prenatal care and labor and delivery. Don’t forget that unexpected things can happen, so it is important to also check on the costs of extended stays, NICU time, c-sections, etc.

With most health insurance policies, adding a new person to it will cause the cost to increase. Considering this, it is important to check with your HR department to see how much adding a new dependent will increase your monthly premium. If both spouses are working, it is also important to review both spouse’s health insurance plans to determine which one would give you a better bang for your buck.

Maternity/Paternity Leave

How much time are you and your spouse going to take off from work once the baby is here? Will your employer provide paid leave? The answers to these questions can significantly affect your household finances. It is important to understand your company’s policies to determine how much loss of income you’ll need to budget for. Also, review your state’s laws as some states provide maternity/paternity benefits as well.

Baby Stuff

Remember earlier when I said kids are expensive? They require a lot of stuff, so it is especially important to take into consideration things you’ll need to buy before and after your baby arrives (crib, stroller, car seat, etc..). Consider buying used items to keep your spending under control!


Nowadays, childcare can be as expensive as a mortgage! If you are not one of the lucky ones to have a bunch of family around willing to watch your children, it’s important to plan ahead for this. There are different costs associated with different types of childcare (daycare, nanny, etc.) as well, so you’ll need to balance your wants with what fits into your budget.

Emergency Fund

If you do not already have a “rainy day” fund, now is the time to anticipate some emergencies. If your kids are like mine, they will be accident-prone, so it is important to have some money set aside to be able to pay for the unexpected. Three to four months of expenses is a good place to start!

House/Car Big Enough?

If you have a two-door sports car, I promise getting a baby in and out of their car seat will not be fun! Once you have a baby, you might realize that your house and/or car are not big enough for your growing family. If this is the case, you’ll need to start really looking at your budget to determine how/when you’ll be able to afford the upgrades.

Basic Estate Planning

Who would you want to take care of your children if both you and your spouse were to pass away prematurely? These conversations are not fun, but you want to make sure your children are taken care of. It is important that you create at least a will to designate guardians for your children. If you don’t, the courts will.

College Planning

The earlier you start saving, the more affordable college costs will be! Keep in mind that this is only the beginning!! The cost of having babies does not stop as they get older. The money you are spending on diapers and formula just changes into school supplies and sports activities. Now is the time to start taking the steps that will set your family up for financial success.





Reference: The Atlantic, 2020. https://www.theatlantic.com/health/archive/2020/01/how-much-does-it-cost-have-baby-us/604519/#:~:text=For%20women%20in%20many%20developed,in%20Health%20Affairs%20has%20found

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through WCG Wealth Advisors, a registered investment advisor. WCG Wealth Advisors and The Wealth Consulting Group are separate entities from LPL Financial.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.