You Had a Baby - Now What?

You Had a Baby - Now What?

February 10, 2017

Adding a child to your family is arguably one of the most momentous milestones in life. After months of preparation, a little one arrives and stirs up overwhelming emotions and a great sense of responsibility. But even if you had everything organized and prepared to bring your baby into your life and your home, there are some practical steps that you need to take now that your family has grown. From hospital bills to education, a child can cost half a million dollars, so your financial strategy needs to change to keep up!

If you’ve recently had a baby or are currently expecting one, make sure you’ve covered your bases and considered these important tips.

1. Research Childcare Options

It’s easy to get wrapped in the excitement of being pregnant and the seemingly endless decisions: What crib should you buy? How many strollers do you need? What’s the highest rated car seat? While preparing for the baby’s arrival, many people delay researching daycare options. They assume they’ll have time before the baby arrives and they have to return to work.

But time moves quicker than you realize, especially in those sleep-deprived first few months. Before you know it, it’ll be time to return to work, and you want to have peace of mind that your child is in good hands. Unfortunately, those that don’t plan early learn the hard way that childcare centers fill up quickly. You don’t want to find yourself scrambling in search of alternatives.

It’s never too soon to find a daycare for your baby and reserve a spot in advance. The best and most highly coveted childcare centers are booked far in advance for a reason, and you don’t want to end up on a mile long wait list, especially if you are set on a particular program. Give yourself time to visit different locations and have plenty of options.

2. Review Your Life Insurance Coverage

Your life insurance needs may change now that you’re adding another member to your family and, potentially, losing an income if one parent chooses to stay home instead of working.

To ensure your life insurance coverage is appropriate for your new situation, you’ll want to examine your finances and determine how much coverage you need to protect your growing family adequately.  

Make sure you add your new child as a beneficiary and that all paperwork is up-to-date. You will also need to consider how your assets will be distributed to your child and any other children or dependents you have.

3. Update Your Will or Institute a Trust

It’s unpleasant to think about not being there for your child, but taking care of all the details will give you peace of mind. If you already have a will, update the information to include your new addition. If you don’t, take the time to make one. Wills go beyond the matter of who gets what amount of money since they also address guardianship, something you don’t want to ignore.

As an alternative, trusts can be an efficient measure for controlling what happens to your assets after you’re gone. A living trust can be more time-consuming and expensive than a will, but the long-term benefits may be worth it. A living trust offers privacy, avoids probate, and may help you save more money in the long run. Make sure you set aside the finances needed for a living will before your baby arrives and you are faced with the additional expenses of your new family member.

4. Set Up an Emergency Fund

If one thing is guaranteed, it’s that your new baby will cost you a lot of money. You may need to rework your budget to make room for all the basics, such as diapers and childcare, but you would also be wise to have a bit of money set aside for unexpected costs, like trips to the ER or additional babysitting. You don’t want to dig into your savings to take care of these expenses.

5. Invest in a College Savings Plan

When a college education in the U.S. can cost upwards of $334,000, it’s a good idea to start saving for your child’s education as early as possible. Take advantage of time to reap the benefits of compound interest. If you put $100 a month toward your child’s college education, after 17 years’ time, you would have saved $20,400. But that same $100 a month would be worth over $32,000 if it had generated a 5% annual rate of return.*

You have options when it comes to college savings, such as a 529 plan or an education savings account. Whatever you choose, start early. Every little bit helps.

While your new bundle of joy will be your priority in almost every area of life, don’t let college savings take precedence over retirement goals. Building up your retirement account ensures that your child won’t have to take care of you financially in the future.

*The rate of return on investments will vary over time, particularly for longer-term investments. Investments that offer the potential for higher returns also carry a higher degree of risk. Actual results will fluctuate. Past performance does not guarantee future results.

6. Consult With a Professional

If you’re feeling overwhelmed or financially unprepared, chatting with a financial advisor to review your financial strategies may increase your confidence. If you’d like to discuss your current circumstances and how you may need to adjust your plan, I’d be happy to meet with you. When you are ready to talk, you contact me at (626) 529-8347 or email me directly at

About Ricky

Ricky Biel, CRPC® is a wealth manager with Haydel, Biel & Associates, an independent financial advisory firm serving individuals and families near Pasadena, California. The firm was founded in 2004 by Chris Haydel and Ricky Biel with a desire to provide unbiased, client-centered, community-based financial advice. Together, they have built a practice that has grown into a family of caring, smart professionals committed to blending proven investment methodologies with creative financial technologies that make it easier than ever to accomplish your goals. They strive to keep things simple and fun to give their clients peace of mind and alleviate financial stress. HBA Wealth takes care of their clients’ needs first and foremost and goes the extra mile to make their clients’ finances grow. To meet and see how the HBA Wealth team may be able to help, contact them today at (626) 529-8347 or email Ricky directly at