Changes to Make to Your Finances As Your Family Grows
By Jared Andreoli, CFP®, CSLP®
As a physician, you thought you were prepared for just about anything—until you decided to grow your family. Any new parent will tell you how life-changing parenthood can be, giving a whole new meaning to being “on call.” Sure, there will be times when you follow your intuition or even wing it, but you’ve quickly realized there’s one area you won’t compromise on: your finances.
Adjusting your finances to support a growing family isn’t just about budgeting and childcare costs, it’s about planning for your child’s future. Up to this point, you have committed to your patients’ well-being—and now you’re just as committed to your child’s.
Whether you are a new or soon-to-be parent, let’s explore how your life and financial picture may shift as your family grows.
Financial Evaluation and Budgeting
As you grow your family, you’ll want to reexamine your finances and take a closer look at where your money is going. You may find it’s time to consider dialing back on things like eating out or spontaneous weekend getaways. Redirecting some of these funds toward a dedicated budget for future expenses can help buffer the rising cost of raising children.
Evaluating your spending habits lets you sort through your priorities, keeping essentials like healthcare, housing, and childcare at the top of your list. The fact is, childcare can be quite expensive. The Bank of America Institute recently reported that the average household spends more than $700 a month on childcare, with some households paying nearly double that amount. If you’re proactive and budget ahead for this expense, you can avoid major financial issues once the time comes.
Planning for Parental Leave
In addition to looking at your expenses, you’ll want to understand your parental leave. It’s important to create a financial cushion to manage any income gaps during your absence. If you’re looking for a smooth financial transition into parenthood, consider assessing your financial situation beforehand to craft a plan that covers essential expenses and unforeseen costs.
Preparing early and aligning your finances to accommodate potential income changes better equips you to cherish those first moments with your little one, without the added financial stress.
Preparing for Childcare
It’s never too early to plan when it comes to childcare, especially considering the extensive waiting lists that come with high-quality facilities. Start the search for a suitable day care facility early, ideally during pregnancy. This helps alleviate the stress of securing a spot for your child at the last minute.
Plus, you’ll have a better chance of finding a provider that both you and your child will be comfortable with. Advanced planning opens up the opportunity to research and visit potential centers, giving you the power to pick just the right spot to nurture your child in the years to come.
Investing in Your Child’s Future
When picturing your child’s future, do you see them pursuing a college degree? If so, consider setting up a 529 plan, an investment tailored for education expenses. This plan provides the tax advantages and flexibility you need to navigate ever-rising education costs and help support your child’s career dreams.
Reviewing Employee Benefits
Another crucial spot for review is your employee benefits. If you’re lucky enough to have ancillary benefits, take advantage where you can. You may be eligible for supplemental coverage or a dependent care flexible spending account (FSA) that can complement your updated, family-focused financial plan.
Evaluating Insurance Coverage
Beyond employer policies, now’s a good time to evaluate your insurance coverage outside work. Consider policies that complement your employer’s offerings and provide an additional shield for your family’s future. Since there are various options available to suit your situation, consider looking to a trusted advisor for guidance.
With your insurance needs covered, you can foster a legacy of stability that carries your family through if you’re no longer here to support them in the future.
Let Us Support Your Growing Family
If you’re a new parent or thinking of becoming one, we at Simplicity Financial LLC are here to guide you through your parenting journey. We want to help you experience a smooth transition into parenthood and start down the right path from the beginning.
To get started, schedule a free consultation, or reach out to us by emailing jared.andreoli@simplicityfinancialllc.com or calling 414-207-6473.
About Jared
Jared Andreoli, CFP®, CSLP®, is president and financial planner at Simplicity Financial, a fee-only RIA dedicated to helping early-career physicians conceptualize their financial picture and achieve their financial goals. Jared specializes in devising individualized financial road maps for clients, and he loves nothing more than a full-day meeting with clients who value his partnership to solve problems—big and small.
After college, Jared spent six years working as a mutual fund administrator for a large company. While he learned an immense amount about the financial world, he was missing the personal connection of working with individual clients. Combining his passion for finance and personal connection, he established Simplicity Financial in 2017.
Jared has a degree in finance with a concentration in financial planning from Western Kentucky University, along with the CERTIFIED FINANCIAL PLANNER™ (CFP®) and a Certified Student Loan Planner (CSLP®) certifications. Outside of work Jared enjoys cooking and traveling. He played baseball in college and still coaches occasionally. He and his wife recently welcomed a daughter, who occupies most of their time. To learn more about Jared, connect with him on LinkedIn.