Financial Tips For Expecting Parents - Bitter to Richer (2024)

There is a lot you have to do when you have kids, and sometimes the financial aspects of parenthood don’t get the attention they deserve. While there is a never-ending amount of things to teach and show your kids, don’t forget to show them aspects of financial management along the way – and make sure you take care of your finances in the first place. Having kids is expensive, but an incredible and rewarding experience. If you’re expecting, make sure you go over these financial tips for parents.

This way you know your bases will be covered, and you can continue to work on the other aspects of raising a child. Knowing your finances are in order can give you a lot of relief and a peaceful mind.

Talk With Your Spouse

The first thing you need to begin, and do continuously, is talk about finances with your partner if you have one. It’s incredibly important to keep that communication ongoing and honest, and it shouldn’t be a hard or tricky topic to broach. This communication will help make sure your household is in order and that you can work together to reach your mutual goals. When it comes to talking about money, just make sure you’re kind, honest, and understanding of the other person. Everyone has different priorities, so be ready to hash it out and potentially come to a set of compromises.

Figure Out The Income Situation

There is a lot to decide when it comes to making money and how you’ll divvy up certain responsibilities. If you want to make more money, there are multiple avenues available to you that will help you reach a comfortable six figure income. Of course, there is more to it than that once kids are involved.

Single Parents

If you’re a single parent, then you have your work cut out for you. Not only do you need to make enough money to make ends meet, but you’ll likely also have to pay for childcare. That isn’t the end of the world, and this scenario is manageable, but that only increases the financial burden on you. If possible, it’s best to have a partner with you who can help you along the way. However, since life happens and that isn’t always the case, prepare yourself for a lot of hardship.

There is no easy solution, and you’ll have to do a lot of work – both financially and with the kids. This isn’t an easy path, but you can still make sure your kids have a good life and childhood.

One Job Doesn’t Make Sense

If you have a partner and one of you has a job that doesn’t make enough money to make financial sense (likely because of the cost of childcare), then your answer is probably fairly straightforward. In this case, you’ll probably want the partner with the less substantial income to stay home with the kids. Not every family can afford this, but if you can it will surely make your life easier. Having someone who can stay at home to take care of kids and reduce the cost of childcare (and other expenses, like food) will help your finances stay healthy and secure.

Both Jobs Are Mandatory

If both incomes are necessary, then you will have to make sure you find proper childcare. With both parents working, it can be hard to find time for your kids as well as daily chores and errands. Figure out a way to divide and conquer tasks, and make sure you find some time to spend with your kids at least each week.

Not every family can afford to have someone stay at home, which is unfortunate, but it’s still of the utmost importance to spend quality time with your kids. Not only is it for bonding, but it’s also so you can properly teach and guide them to become better individuals with better opportunities than you had. After all, isn’t that what we want?

Childcare

Childcare is one of the most common, and one of the largest, expenses parents will have to deal with. Now, in an ideal situation this isn’t necessary. Ideally, one of the parents will have enough time to take care of them – or the parents will be able to tag-team it together. However, for many people, between work and other obligations, you may not have that luxury. If that’s the case for you, then you’ll need to find childcare and figure out a way to pay for it.

Employer Benefits

The first thing to look at is any employer benefits you have that may help. Some employers assist with childcare expenses. If they have some program like that, be sure you take full advantage of it. After all, these benefits are part of your compensation as an employee. Alternatively, they may offer childcare themselves. Many employers who offer childcare do so at a reduced cost. Again, if that’s the case then it would be wise to take advantage of it as anything that reduces your childcare expense is a huge boon.

Family

It’s possible that you may have family living near you. If they’re willing to help, that’s less headache for you and fewer daycare bills to pay. With this, just make sure your family is responsible when taking care of your child, and make sure you aren’t taking too much advantage of your family. They have their own lives too, and while the help should be welcomed and appreciated, you shouldn’t abuse it.

Nanny

If you have the money, consider getting a nanny. A nanny can be a lot more useful and reliable – and potentially easier to trust. They can be quite expensive, but you may find it’s well worth it. If you can’t afford a full-time nanny, you could always look into having one come and help for one or two days per week. That’s a less common solution, but I’ve heard it works well for people with irregular schedules or who work remote at least partially.

Maternity & Paternity Leave

Do you best to take all of your maternity or paternity leave. Spend time with your child and get readjusted to what your new “normal” will look like. In my opinion, family is far more important than any single job. Your employer can wait on you, and you’ll be back soon enough anyway. So, don’t feel guilty about taking this time off. In all likelihood, you’ll really need it.

Tax Benefits

When you have your kids, make sure you take advantage of any tax break available to you. Having a dependent can significantly decrease your tax burden, which makes it that much easier to reach your financial goals as a family. Update your tax forms with your employer, claim your dependents when you file your taxes, and make sure you do everything you can to minimize your tax burden (within legal and ethical boundaries, of course).

Estate Planning

I’ve discussed the importance of estate planning before. Making an estate plan sets up your family and is a good way to get your finances in order. On top of that, it gives you a clear insight into the current state of your finances and can give you a good idea about where you need to end up. So, once you’ve had a kid it’s important to get this in order. Don’t wait or push it off – for most people it shouldn’t be incredibly complicated. Stay on top of it so that everything is still taken care of, even if you aren’t there to help.

Create A Budget And Stick To It

The key to avoid overspending is to create a detailed budget and stick to it religiously. If you haven’t already, sit down and create a complete budget. Don’t be afraid to tweak it over the first few months and adjust it when major life events happen. Creating and following a budget is a learning process, so don’t be so afraid of making mistakes that you don’t even try.

Build An Emergency Fund

Coupled with a solid budget, it’s also time to build an emergency fund. If something horrible happens, like outlandish medical bills or losing a job, you want to have a little bit of a cushion for yourself and your family. I recommend saving at least six months worth of expenses to start. For more information on emergency funds, how much to save, and where you should put your savings, you can read my full article on the topic here.

Teach Them Important Financial Skills Along The Way

As opportunities present themselves, be sure to teach your kids important financial skills as they’re growing up. There’s a lot you’ll have to teach your child or help them with, but don’t forget to include the important aspects of managing finances. Introduce them to some basic concepts, ensure they have the discipline to stick to a budget, and they’ll end up thanking you when they get older!

Lead By Example

As you’re teaching them, remember that it’s of the utmost importance to lead by example. Even if you teach them certain skills and raw facts, they’re likely to mimic what they saw growing up. So, if you teach them about budgeting and investing, it may do no good if they spend their entire childhood seeing you not follow your own advice.

Set Your Child Up For Life

There are tons of ways you can help set your kid up for life. The extent you want to assist is up to you, just know there are tons of options at your disposal. The main thing you need to know is that the more you plan ahead, the easier it is to actually have a significant and long-lasting impact on their finances. So, if you want to help set them up, then take initiative now.

Conclusion

Hopefully these tips are useful for new and expecting parents. If you have any tips of your own to share, I’d love to read them in the comments! For more content like this, and a free budgeting template and financial goals worksheet, sign up for the Bitter to Richer newsletter.