Planning for Your First Child
Financial planning for your first child can feel overwhelming. As many of you know, I got married in May, and family planning has been on my mind. Many of my clients are either welcoming newborns or preparing to start a family, and while it’s an exciting chapter, it also comes with big life and financial changes.
Here’s a step-by-step guide to what you need to consider and what I’ll be doing myself when the time comes.
Update Your Life Insurance (Term)
If you have a spouse and a baby depending on you, life insurance is essential. That 1× salary policy through work? It’s nowhere near enough.
You want coverage that can:
• Replace income for 10–20 years
• Pay off debt
• Fund education goals
• Cover final expenses
Consider having coverage independent from your employer so it can stay with you even if you change jobs.
Create or Update Your Estate Plan
If you’ve been procrastinating on this, now’s the time. With a child on the way, you need a plan that includes:
• A will or revocable trust (with pour-over will)
• Health-care directive
• Financial power of attorney
• Guardianship designations
This helps ensure your wishes are honored, and your child is protected. We don’t want these important decisions left to the courts.
Our team uses Vanilla to help make the estate-planning process more seamless and organized for you and your family.
Revisit Your Budget
Children can significantly increase your monthly spending by hundreds or even thousands of dollars.
Ask yourself:
• Will one parent stay home?
• Daycare or nanny?
• How often will you go out and need to pay a sitter?
Rework your budget now to reflect your new lifestyle. And don’t forget — date nights still matter!
Strengthen Your Emergency Fund
As expenses rise, your safety net should too.
Consider increasing your emergency fund so you have additional cash available to handle unexpected expenses without disrupting your long-term financial plan.
Prepare for One-Time Baby Costs
Crib, stroller, car seat, nursery setup — maybe even a new car.
Plan for these expenses ahead of time and stay within your means. It’s easy to overspend when excitement takes over.
Review Health Insurance Options
The “cheapest” plan may no longer be the best fit.
Evaluate:
• Deductibles and out-of-pocket maximums
• Maternity and delivery coverage
• Pediatric care
And once your baby arrives, make sure to add them to your health insurance plan within the required enrollment period.
Start Saving for Education
If funding college is part of your goals, consider opening a 529 plan early to benefit from tax-free growth for qualified education expenses and potential state tax benefits.
If college savings isn’t the goal, you may also consider a UTMA or taxable investment account that can eventually be used or gifted for your child.
If you’re expecting (or planning to), I’m happy to walk you through what’s next, from budgeting to estate and insurance planning.
B. Riley Wealth Management, Inc. and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal ,and accounting advisors before engaging in any transaction.
Certain services require collaboration with unaffiliated third parties. Vanilla is not affiliated with Opes Private Wealth Management, Eisner Wealth Management, B. Riley Wealth Management, or any of its subsidiaries.