4 Financial Moves to Make When Starting Your Family

Sara BaileyUncategorized

Some things in life are okay to put off: listening to your voicemail, finishing that craft project, writing the screenplay your college-aged self promised you would. But when you start a family, there are some things you can’t afford to delay. Failing to put the right financial safeguards in place could leave your family in a tight spot if something unexpected happens. And if life teaches us anything, it’s that the unexpected should always be expected.

When you’ve just welcomed a bundle of joy or have a little one on the way, these are the financial moves you need to make ASAP.

Grow your emergency fund

An unexpected $1,000 bill would put most Americans’ finances in a bind. If that’s the case for you, it’s time to think seriously about an emergency fund. Letting your bank account go into the red is a lot riskier when you have a little one relying on you. If you don’t want to worry about finances during a late-night trip to urgent care or when your car breaks down on the way to daycare, start saving an emergency fund that can cover three months of necessary expenses.


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Start a house fund

Many couples start thinking seriously about buying a home when expecting their first child, and it can be a great move for your family’s future. Buying a home allows you to budget without worrying about rising rents and provides an asset you can pass down to your children. While many young couples assume they can’t buy a home without saving 20 percent for a down payment, an FHA loan from PennyMac loan services* lets buyers put as little as 3.5 percent down even without stellar credit history.

Even if buying isn’t on the horizon, it’s wise to start a house fund. It’s only a matter of time before you outgrow your old space, and when you do, you’ll want money for deposits and moving expenses.


Buy life insurance

Buying a house may be optional, but buying life insurance isn’t. The loss of a parent can financially devastate families, and life insurance is one way to protect against it. Depending on the policy size, life insurance can fund a funeral, pay off your mortgage, and/or replace lost income and childcare expenses.

While shopping online for life insurance is convenient, don’t get swayed by policies that promise no medical exam. It is possible to get life insurance without an exam, but it’s not wise when you’re young and healthy. Passing with flying colors could help you get lower insurance rates, while skipping the exam is likely to leave you paying more. Since most life insurance exams give a quick blood test to check for high blood pressure, cholesterol, and a few other health markers, it’s nothing to worry about.

Save for your child’s education

When everything else is settled, it’s time to think about your child’s future. While six in ten parents have college funds for their kids, saving for your child’s education goes beyond college. From early education to high school extracurriculars, there’s a lot to budget for if you want to give your child the best educational opportunities possible. 

Studies show that early care and education leads to long-term educational and economic benefits for children, as do extracurricular activities for older students. However, these opportunities can strain a family’s budget when they’re not planned for. Families should budget for early education costs while taking advantage of 529 Plans** and Coverdell Education Savings Accounts to save for college and K-12 expenses.

There’s so much to do when welcoming your first child, from fun stuff like designing the nursery to not-so-fun stuff like dealing with health insurance. In the midst of the excitement and chaos, make sure you remember to take these financial steps. When it comes to building your child’s future, you want to be confident you’re on a solid foundation.

About the Author

Sara Bailey has lost her husband. She created a website with resources helpful for those of us who have lost their partner and suddenly find themselves raising their children on their own.

"Through this site, I will be sharing my unexpected and ongoing journey of losing my husband and learning to be the best parent (and person) I can be while nurturing my grief. Parenting, much like life itself, is full of ups, downs, twists, turns, sorrows and joys — that’s just as true when you’re a widow, and maybe even moreso. But with love, acceptance, time and community, we all can and WILL triumph over tragedy."

*ScuttleBugs occasionally accepts blogs from guest authors. We do so only if we believe the topic or contents might be of use or interest to families, employees or associates of ScuttleBugs. That said, we are not advocating or supporting one way or the other for any services or entities mentioned as we understand readers will make their own judgements. If we do want to support some good cause, you can believe we will clearly say so 🙂

**As far as we know, ScuttleBugs is the first childcare center anywhere to offer a 529 contribution. ScuttleBugs 529 is a scheme where, although college is still far in the future, we encourage our parents to open 529 College Savings Funds for their kids. Then, as their children progress through ScuttleBugs, we plan, each year, to put some of our own money into those funds thereby accelerating the funds growth.