What I Wish I Knew About Money Before Becoming a Parent

Becoming a parent changes everything—your sleep, your priorities, your Spotify algorithm, and definitely your finances. I remember the moment I held my newborn and thought, “Wow… you’re amazing—and also very expensive.”

If you’re about to be a parent (or just became one), let me save you a few financial headaches. There’s a lot I wish I’d known before diapers and daycare took over my budget. The good news? With a bit of planning and the right mindset, you can get ahead of the curve and build a financial plan that protects your growing family and your sanity.

Let’s walk through it—parent-to-parent.

Baby Expenses Are No Joke (But They Are Manageable)

When my partner and I found out we were expecting, we had that blissful moment of “we’ve got this”—followed immediately by panic-Googling strollers and college savings plans.

1. The Real Costs Start Early

We blew our first-month baby budget in a week. Between diapers, bottles, gear, and doctor visits, everything adds up fast. One minute you’re buying a cute onesie—next thing you know, your Amazon history looks like a tiny human moved in.

Pro tip: make a realistic baby budget before you buy anything. Include recurring costs like formula or wipes and leave wiggle room for surprise expenses (because they will come).

2. Adjust Your Budget Like a Boss

We trimmed the fat fast—cutting unused subscriptions, paused takeout splurges, and rerouted those savings to our new “baby expenses” category.

Apps like YNAB or Mint were lifesavers for tracking everything. And yes, we made spreadsheets. Plural.

Emergency Funds: The Safety Net You Didn’t Know You Needed This Much

I always meant to build an emergency fund. But once our baby arrived, it became a top priority—because babies don’t care if your car battery dies or your water heater explodes.

1. Start Small, But Start Now

We didn’t have three months of expenses saved up right away. But we started with what we could—$50 here, $100 there—and built it up steadily.

Set a target (3–6 months of living expenses), and automate deposits if you can. Slow and steady wins the peace-of-mind race.

2. Where to Stash It

Keep your emergency fund in a high-yield savings account that’s easy to access, but not too easy to spend. Ours lives in a separate account, earning more than a regular bank, just waiting quietly for a rainy day.

Don’t Sleep on Insurance (Even If You’re Sleeping Less in General)

Insurance isn’t fun, but it’s essential—especially with a family counting on you.

1. Health Insurance First

Add your newborn to your plan ASAP. Review your coverage now to avoid surprise bills later. We found that upgrading to a family-inclusive plan actually saved us long-term.

2. Life Insurance: Yes, Even If You’re Young

We got term life insurance—it’s affordable and covers the what-ifs you hope never happen. Calculate what your partner or child would need to stay afloat if you weren’t around.

Not a fun topic—but incredibly important.

Think About College Now (Yes, Really)

It feels wild to save for college when your kid can’t even sit up yet. But the earlier you start, the easier it is.

1. 529 Plans Are Your Friend

We opened a 529 and set up small monthly contributions. Tax-free growth, state tax perks, and flexibility if your kid doesn’t take the traditional college route? Yes, please.

2. Other Options

We considered a custodial account too, but decided it was less flexible for long-term planning. Still, it’s a great choice if you want to gift money for future use beyond school.

Retirement Still Matters (Don’t Skip This Part)

It’s tempting to pour everything into your child’s future—but don’t forget your own. You can’t support your kids if you’re struggling later on.

1. Keep Retirement Contributions Going

We made a rule: Retirement savings stay non-negotiable. We max out our 401(k) match and contribute to IRAs—even if it means scaling back other goals for a bit.

2. Update Beneficiaries and Plans

We reviewed all our policies after our child was born—insurance, retirement, even our will. It’s one of those adulting tasks that brings real peace of mind.

My Five Cents!

To leave you with practical steps, here are my five cents on financial planning for new parents:

• The Baby Budget Binder: Create a physical or digital binder tracking every expense, from the major initial purchases to ongoing costs.
• The Subscription Clean-Up: Carefully review and cut back on non-essential subscriptions—redirect those funds towards your emergency savings.
• Set and Forget: Automate your savings, setting up automatic transfers to both your emergency and education fund to ensure consistency.
• Monthly Money Meetings: Set aside time with your partner to review finances, adjust budgets, and discuss upcoming expenses.
• Celebrate Small Wins: Acknowledge little victories, like paying off minor debts or achieving savings milestones, to stay motivated in your financial journey.

Parenting Is Priceless—But It Still Comes With a Price Tag

Raising a child is full of surprises—some amazing, some expensive. But the truth is, getting a handle on your finances doesn’t have to be overwhelming.

Take it one step at a time. Prioritize what matters most. And remember: financial planning isn’t about having it all figured out from day one—it’s about setting your family up for stability and joy over the long haul.

You’ve got this. And when in doubt? Trust your instincts—and your budget.