How to Make Your Money Fit Your Growing Family
Expecting a new member of the family is an exciting time—and an expensive one. Learn about strategies for making sure your finances grow with your family.
Some changes in life literally change everything—starting or growing your family is one of them. And yes, money is important, but a bit of strategy and planning can help you alleviate financial stress and give you space to enjoy this amazing phase of life.
Talk it out. All the way out.
One of the most helpful things you can do for your growing family finances is to dig in and talk about what a new addition means to the whole family. Talk about goals, budgets, emergency funds, priorities, and even long-term aspirations like a college savings fund.
Get ready for new budget needs.
Take a look at your current budget with fresh eyes. Things are going to change pretty much across the board. So seek out any places you can cut because these are some of the new line items you’ll need to consider:
Diapers: No matter which route you go—cloth or disposable—babies may require 10 or more a day!
Child care: If you’ll be adding child care, research options in your area to help estimate cost.
Clothing and gear: While there may be no shortage of onesies to start, babies outgrown them quickly. Consider matching how much you spend to how long they’ll be wearing that size.
Insurance: Adding a dependent to your healthcare plan may raise your monthly premium.
College savings plan: It seems ridiculously early, but it’s not. Consider adding college savings to your monthly budget now and you could be set when your child turns 18. Try our college savings calculator to learn more.
Look for ways to cut debt and lower rates.
Search out any areas where you’re overspending (like dinner deliveries) or where your interest rates on a loan are super high—and look for ways to improve.
Credit cards: If you’re unable to pay off your balance in full each month, call your credit lender and simply ask if it’s possible to lower your interest rate.
Student loans: Refinancing student loans might be a smart next step. Your goal will be to reduce that debt by combining multiple loan payments into one monthly payment while also reducing your overall rate, payment, or both.
Plan for a great future, too.
The here and now will be so exciting and all-consuming. But don’t forget about the important long-term financial goals you have for the future, such as:
Retirement: It’s easy to forget about your own future when you’re happily focused on the present and your growing family, but retirement savings are important. And remember, compound interest is your friend—so the earlier you start, the better. If your employer offers a 401(k) or other retirement solution, start or continue contributing to it to be sure you’ll have what you need later in life.
College Savings (yes, already!): It seems ridiculously early, but it’s not. Adding college savings to your monthly budget or setting up a state-sponsored 529 College Savings Plan for your little one is simple and you can even choose to have automatic monthly contributions happen—so you can just set it and forget it. Try our college savings calculator to learn more.