It’s hard to know what to expect when you’re expecting. While parents-to-be happily stock up on the hottest baby items, book those post-birth newborn photo sessions and labor (no pun intended!) over the most perfect baby name, many ignore the less glamorous, though arguably more important tasks ahead of them. With this in mind, it’s essential to take stock of the growing family’s financial fundamentals before Baby even arrives on the scene.
Thrilling, we know. But having your financial ducks in a row might be the most impactful thing new parents can do for their child. And it doesn’t have to be difficult. We break it down for you so you can check these tasks off the list and be well equipped for Baby’s arrival.
Before Baby comes, it's time to get real about finances with your partner. Review your annual expenses, shore up your emergency fund, and revisit your investments. Once you have the money basics covered, it’s time to take a deep dive into your post-birth financial future. It’s essential that you and your partner are aligned on a spending philosophy around Baby. Whether it’s daycare vs. nanny, public vs. private education, or urban vs. suburban living, it’s never too early for parenting partners to start the spending conversation.
Additionally, parents need to get to the bottom of parental leave benefits so both partners understand not only how much they will earn while caring for their newborn, but also how much unpaid leave they can afford to take. Partners can also investigate if employers will cover any other baby-related expenses (i.e. IVF treatments, adoption expenses, etc.) and make sure to take full advantage.
Babies are expensive. Like, really expensive. Don’t let the drain on your finances take you by surprise. With your partner, make a simple budget to get a grip on how things will change after Baby’s birth. From the big things (childcare! bigger house! larger car!) to the little (or not so little…weekly cost of diapers), leave no stone unturned so you know just what to expect when you’re expecting.
On the flip side, having an emergency fund for unexpected baby expenses is also essential. Benjamin Talks co-founder Carissa Jordan says, “My husband and I had our fair share of unanticipated medical expenses. For example, two of my three children were born with tongue-ties and we had to pay out-of-pocket for their correction procedures.” From genetic testing to cordbanking to post-birth jaundice, mothers and babies alike often require medical expenses that can add up quickly. Whether expected or unexpected, make sure you and your partner are not caught off guard financially. Have frequent check-ins to make sure you are both on the same spending page when it comes to budgeting for Baby.
In those early days of pregnancy, it seems expectant parents have to learn a whole new language. Bugaboo, DockATot, Snoo, Jumperoo...at times the laundry list of recommendations for one tiny human can feel overwhelming. Do your research. “I asked anyone and everyone what their tried and true baby items were and only registered for the non-negotiable essentials,” says Carissa. “You never really know what your baby’s preferences or needs will be until he or she arrives, and then the baby changes constantly. I did, however, splurge on a BabyBjorn bouncer and it was an absolute essential for all three of my newborns.”
“I asked anyone and everyone what their tried and true baby items were and only registered for the non-negotiable essentials.”
Benjamin Talks co-founder Nikki Boulukos, adds “While my oldest loved the Fisher Price Rock ‘n Play, it didn’t work well for my second child, and then it was recalled. With my third child, I didn’t want to invest in a newborn bassinet that might not get a great deal of use, so I purchased one second-hand from a friend.” Since every baby has different preferences and you don’t know what the Baby is going to like until they arrive (and even then, they constantly change!), it might be best to borrow or buy big ticket items second-hand.
What’s more, baby registries have majorly evolved. These days, in lieu of another bib, blanket, or bouncy seat, you can actually make financial gifts for a baby that can truly make an impact on their future. Now, everyone from baby shower guests to eager grandparents can easily make contributions to your little one's Baby Fund with EarlyBird. No gift wrap needed! Lastly, friends and family can also gift funds towards Mom and Baby’s support network through BeHerVillage. From lactation consultants to postpartum doulas and night nurses, BeHerVillage gives new parents the financial flexibility to find the support they need through the fourth trimester and beyond.
Well this sounds like a barrel of laughs. While these tasks rank right up there with a requisite DMV trip, you’ll feel good once you’ve taken them off your to-do. First, fill out the necessary paperwork in advance so you can add Baby to your health insurance within 30 days of birth. Next, if you haven’t already, now is the time to buy life insurance. For young, healthy people it’s a minimal investment for maximum peace of mind.
As Nikki advises, “Hedging downside risk is equally important as investing in the future. Think of life insurance as a safety net for the worst case scenario.” Finally, make (or update!) your will. We know, this feels scary...but it’s essential that you appoint a guardian for your baby-to-be. Services like Trust & Will make estate planning as simple, affordable and inclusive as possible by giving everyday Americans access to plans to protect both their loved ones and their legacy.
Savings accounts are so last year. It’s time to bring Baby into the 21st century by setting up a digital investment account in their name with EarlyBird. EarlyBird makes it easy for parents, grandparents, godparents, etc., to directly contribute to Baby’s growing nest egg. By crowdfunding wealth creation through EarlyBird, cash gifts become far more powerful as investable dollars. “When I went to furnish my first apartment after my college graduation, I turned to the savings bonds gifted to me as a baby by my extended family,” says Carissa.
“Just imagine how meaningful those modest financial gifts would have been if they were actually invested!”
Through the power of compounding, even the smallest contributions by friends and family can lead to a meaningful investment over time. As Nikki says, “When it comes to baby gifts, I always prefer to make wealth not waste by contributing to a new baby’s financial future.” While there is no doubt that the best things in life are free, building a financial foundation for young children helps them know their worth, no matter what path they choose to take in life.
As soon as parents-to-be find out they are expecting, it’s essential they put their best financial foot forward. By taking stock of their finances, building a better baby budget, requesting the right things on a registry, updating healthcare, insurance, and wills and setting up an investment account with EarlyBird, parents can feel confident that they are building the family’s financial foundation…one money-smart decision at a time.
Benjamin Talks is on a mission to make all families financially fit through purposeful products, accessible content and impactful giving. Founded by four moms (three financial professionals and one former teacher), Benjamin Talks aims to create the next generation of money-smart, market-savvy kids and help take the taboo out of money talk.