5 Expert Money Tips for New Parents

An essential checklist to keep baby happy and your finances on track.

Dirty diapers, mysterious rashes, and late-night crying fits. 

Being a new parent is tough. So much gets thrown at you, and far-off financial considerations can take a back seat to the here and now. 

But welcoming a baby into the world has big (and immediate) implications for your wallet: How will you budget for major expenses when paying for an unlimited supply of diapers, formula, and wipes? How will you finance an emergency? And what about paying for child care? 

Here’s some expert advice about what to expect financially — when you’re expecting.

No. 1: Revisit financial goals

Logan Allec, CPA and owner of Money Done Right

Having a baby signals a huge shift in the trajectory of your life. As a new parent, now is the time to readjust your financial goals.

Sit down with your spouse and write down a realistic strategy towards achieving them. After you take a second look at your financial goals, maintenance is key. Schedule a monthly meeting with your spouse to go over your finances. This will help you ensure that your family is staying on the right track financially.

No. 2: Don’t rush expensive purchases

Logan Allec, CPA and owner of Money Done Right

Don’t feel rushed to buy a new car or put a down payment on a home. Combined with the cost of raising a newborn, these purchases can put you in a financial hole. Think through these purchases and plan accordingly. 

Don’t be afraid to buy secondhand items, as well. Your baby will soon grow out of their clothes and toys. As a result, don’t try to keep up with trends. The only item you should prioritize buying new is a car seat.

No. 3: Adjust taxes

Jeff Rose, CFP® and CEO of Good Financial Cents

Now that you have another dependent to take care of, you may want to adjust your W-4. You’ll likely need to take out more taxes or potentially not need to take out as much now. It’s also important to let your CPA or accountant know you’ve had a child or that you’re expecting, so they know you’ll have that tax deduction down the line.

No. 4: Update beneficiaries

Jeff Rose, CFP® and CEO of Good Financial Cents

Whether you have an IRA, a 401(k), or a pension plan, updating your beneficiaries is important to do once you are new parents. This also includes updating any trusts, wills, or other legal documents. 

Thinking about your child’s financial future and making sure they’re [in good hands] if something were to happen [to you] may sound grim, but it’s the best way to set your child up for many of those major unexpected situations.

No. 5: Plan for retirement

Logan Allec, CPA and owner of Money Done Right

With a new baby, retirement may be the furthest thing from your mind, but planning for retirement will protect your child from the possibility of having to support you in the future. Take advantage of any employee-backing 401(k) account. Set up autopay, so you never have to worry about growing the account.

Bottom Line 

Personal finance might be low on your list of priorities when you have a new child, but it shouldn’t be. So use these tips to bring home a bundle of joy — not money stress.

Contributors

Logan AllecLogan Allec is a CPA, personal finance expert, and owner of the website Money Done Right.  After spending his twenties grinding it out in the corporate world and paying off more than $35,000 in student loans, he dropped everything and launched Money Done Right in 2017. His mission is to help everybody — from college students to retirees — make, save, and invest more money. He currently resides in the Los Angeles area with his wife Caroline and son Hunter.
Jeff Rose is a certified financial planner, author of the book “Soldier of Finance,” and self-proclaimed numbers geek. He is the founder of Good Financial Cents and his own wealth management firm. He also writes for Forbes and Business Insider, and his Youtube content is syndicated by Entrepreneur. When he’s not helping people financially, he can be found spending time with his family, feeding his obsession with In-N-Out Burger or working to maintain his ability to dead lift more than 500 pounds. 

What financial tips do you have for new parents? Tell us your best parenting advice on Twitter @OppUniversity.