Planning for a new baby

Before your baby takes his or her first steps, you can start taking a few of your own. It's never too soon to start budgeting for a child, planning for college expenses, considering tax implications and insuring your family now and over time.

Plan for new expenses

Budgeting for new expenses is an important step to take when planning for your new addition.

If this isn't your first child, you can assess how another child will affect your budget.

Costs to take into account:

  • Groceries. New expenses, like diapers and formula, will add up quickly.
  • Housing. You may need more space as your baby becomes mobile.
  • Transportation. A larger, safer or more reliable vehicle may be something to consider.
  • Clothing and household items. Stocking up on baby essentials, such as furniture, bedding and clothing can be costly. Your monthly budget could also be higher, as your child grows and his or her needs change.
  • Medical. Larger insurance premiums, doctor visits, hospital stays and co-pays may affect your bottom line.
  • Child care. Depending on where you live and what type of care you choose (in-home, full-time or part-time), costs for an infant average $5,436 - $24,249 annually.1 Compare the cost of professional child care against what you'd lose in annual income if one parent quit working to stay home. You might be surprised.
  • Education savings. Consider monthly contributions into a college savings plans such as: Coverdell Education Savings Account (CESA), a 529 plan or a Series EE or Series I savings bonds. A UTMA custodial account could also be used to save for college.
  • Emergency savings. If you haven't already done so, now is a good time to build a fund for unexpected illness, job loss or other surprises. It should be enough to cover your living expenses for at least three to six months.
  • Retirement savings. With new baby expenses it can be tempting to cut back on saving for retirement. But securing your own future is especially important if you have children — you don't want them to be responsible for your future health care or housing costs. Try to save at least 10 percent of your salary.
  • Life insurance. Explore insurance options so that your child will be cared for should something happen to you or your spouse.

Other financial planning considerations for new families

Adjusting your finances for a new child can have a major impact on every aspect of your financial life. You may wish to talk to a financial advisor, legal or tax professional to help you plan for more complex questions such as:

Family financial planning made easy with Ameriprise

With a growing family, your goals and priorities can change quickly. Our unique approach to financial planning for new families is built to be flexible, evolving with your life. An Ameriprise financial advisor can meet with you regularly to help you stay on track as you plan for your future.

1 ChildCare Aware® of America,, Parents and the high cost of child care, 2019
Ameriprise Financial, Inc. and its affiliates do not offer tax or legal advice. Consumers should consult with their tax advisor or attorney regarding their specific situation.
Ameriprise Financial cannot guarantee future financial results.
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