What Financial Advisors Wish You Knew About Having a Baby

They may not specialize in diapering and swaddling, but their insights about saving for Baby are not to be missed.
Andrew Parsons

Budget Early

As soon as you find out you're expecting, budget as if your baby is here. As a financial advisor of 15 years and someone who had that moment of "OMG, we're pregnant. What are we going to do?" I recommend this to every parent-to-be. Assuming you don't have any credit-card debt (if you do, work to pay that off first), estimate how much you'll be spending on child care, diapers, and other baby essentials, then put that amount into your savings account every month. Child care will be your biggest new expense, and many day-care centers have a waiting list, so it's a good idea to do your research now anyway. Planning for these expenses will help you feel calmer and more prepared when your little one finally arrives.

-- Anna A. Behnam, a financial advisor at Behnam & Associates, in Rockville, Maryland

Don't Save for College -- Yet!

The first thing so many expecting couples ask about is college, and they're surprised when I tell them they need to save for their retirement first. However, if you're already contributing to a 401(k) savings plan or have grandparents who want to give monetary gifts, open a 529 college savings plan, which allows you to put money away tax-free (see sec.gov for more info). Otherwise, once your child is about to age out of day care, set up a separate savings account and have the money you were spending on that care automatically deposited into it each month. That way, you'll have this pool of cash that's there when you need it for college, camps, lessons, or activities that you someday may want to provide for your child.

-- Rebecca Schreiber, CFP, of Solid Ground Financial Planning, in Silver Spring, Maryland

Draw Up a Will

You need to have a will made as soon as possible, even though you may not have extra money to leave to someone. A will is not so much about your assets as it is who you want to be the guardian of your child if something were to happen to you. Explaining your wishes to your family and friends is also crucial but won't hold up in court. You need this simple document for peace of mind. There are websites that allow you to write your own will, but these documents may not be legally binding in all states. Get referrals
for a lawyer in your area who specializes in wills at a reasonable cost.

-- Kristin Harad, CFP, founder of VitaVie Financial Planning, in San Francisco


Having a baby doesn't have to be as expensive as you think. The latest government report estimates that you can expect to spend an average of $245,340 to raise a child from birth to age 18. I can tell you, I'm not spending that much, mostly because I shop secondhand as much as I can. First-time parents, especially, are tempted to run out and buy everything new because they think that's what being a good parent means. But why spend $25 for a pair of pajamas when you can spend $2 at a thrift store? Even some affluent families I work with upcycle so they have more income for memorable experiences like vacations.

-- Sheryl Garrett, CFP, founder of nationwide Garrett Planning Network, in Eureka Springs, Arkansas

Babies go through an incredible amount of diapers. Whether you are using cloth diapers or disposable ones, here are the best ways to stay on a budget.

Originally published in the April 2015 issue of American Baby magazine.

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American Baby


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