5 Things to Include on Your Financial Checklist Before Your Baby Arrives

As exciting as it is to prepare for a new baby, the financial reality of expanding your family can sometimes feel overwhelming as you navigate everything from medical bills to parental leave to child care costs. In the months leading up to a child’s birth, your focus shouldn’t just be on setting up the perfect nursery (though that can be fun!) but also on getting your finances prepared for expected—and unexpected—expenses. But don’t stress! We’ve got some expert advice to help you get organized.

“When you're preparing for a baby, there can be so many things that you're tackling, and the goal is not to be perfect,” says Laura Combs, executive managing partner at wealth management firm Mercer Advisors. “It's really about creating enough stability so you can enjoy this season of life.”

From budgeting for income adjustments and possible career pauses to planning for unexpected life events, here are five things Combs says all expecting parents should consider when making a financial checklist before their baby arrives. 

1. Consider Your Cash Flow

First and foremost, Combs says it’s important for families to understand how their income may change when one or both parents take parental leave. This includes making plans if you’re going to take time off before the baby arrives, and if you’ll be receiving a reduced income while you’re on leave. 

“I always recommend starting with your employee handbook and connecting with HR to clarify any details,” says Cindy Randolph, wealth advisor at the investment advisory firm Beacon Pointe. She encourages expecting parents to review their employer’s leave policy and any state benefits available, while also building, or maintaining, an emergency fund. 

The U.S. is still the only industrialized nation without a federal paid leave policy, and building an extra cushion is key to giving any parent the flexibility and option to take extra time off if needed, says Combs.

2. Review Your Employee Benefits and Health Care Plan

One expense that Combs says many people tend to overlook is the cost of actually having the baby. In 2025, pregnant women who were enrolled in health insurance plans in the U.S. paid an average $3,000 in out-of-pocket expenses for childbirth, with these numbers drastically changing depending on the type of birth as well as where the family lives, according to Northwestern Mutual. 

“People need to think about, ‘What’s my deductible?’ Because you will likely hit that deductible if you have a baby, and you will have to pay that first portion out of pocket,” says Combs.

In addition to preparing for out-of-pocket delivery expenses, after you give birth, it’s important that you reach out to your HR department and insurance company to get your child added to your health insurance policy. There is usually a limited window for when this can be done. For many employer-based health plans, you have 30 days after a child’s birth or adoption to enroll them under your policy. 

3. Start Saving Up for Child Care Expenses

Child care is one of the biggest line items that people rarely budget for, as it’s easy to underestimate the cost, says Combs. The average parent spends 20% or more of their annual income on child care, with 31% dipping into their savings to cover the cost, according to the 2026 Cost of Care Report from Care.com. 

“Child care costs can rival a mortgage,” says Combs. “That’s why I encourage people to research early and think about what type of care they want? Do they want in-home care? Do they want a daycare? Do they want a nanny?”

As a mom of six, Combs says her family has tried a lot of different options over the years, and it’s really about understanding what you can afford and the pros and cons of each choice.  

For some families, she says it may be easier to make the decision for one parent to stay home for a season. While the thought of an income reduction may not be ideal, she says the math may actually come out ahead when factoring in how much you’re saving on child care costs and the higher percentage you pay in taxes as a two-income household. 

Another way to frame child care is as a short-term investment in your career. If you and your spouse are dedicated to the work you do, it can be worth it to pay for daycare or a nanny, even if it feels like a big expense at the time. Every family has to figure out the right plan for their lives.

One easy savings trick: A few months before the baby arrives, start setting aside the cost you’ll pay for child care each month into a separate savings account. This will allow you to see how this new expense will impact your budget while giving you a little nest egg that you can use for other baby-related expenses. 

4. Take Care of Big Financial To-Dos Like Getting Life Insurance and an Estate Plan

When preparing for a child, it’s important to think about how to protect your assets and your child if something were to happen to you or your spouse. Combs recommends that her clients who want to have a family have some life insurance in place.

It’s OK to start with a small policy—say $250,000, she says. “It doesn’t need to be wild and crazy. But as you look at your financial picture, you want to make sure that if something were to happen to you that you have enough income and life insurance so your child can maintain the lifestyle you would like them to have.”

In addition to life insurance, Combs encourages all parents to also update their will or create a will if they don’t already have one. 

“If you don’t think you have an estate plan, I’m here to tell you that the state in which you reside has an estate plan for you,” she says. That’s why it’s important to have documentation that outlines who will take care of the money for your baby and who will be your child’s legal guardian in the event that you and your partner died.  

Combs also encourages trust-based planning, where parents set up a revocable living trust so that if a $1 million trust policy were to land in their kid’s lap, then it would transfer into a private trust rather than going through a public probate. This way, she says, no one knows how much money your child has. 

You can specify how you’d like that money spent, whether it’s for education or something else.  “We’re a big travel family,” says Combs. “So if something happens to my husband and I, we have decided that we want our kids to continue to have the experience of international travel.” 

5. Start Saving For the Future

Saving early for college expenses and other post-childhood expenses can be really beneficial for both parents and children, though it can be hard with so many competing immediate expenses.

Combs recommends that any parents with a child born between January 2025 and December 2028 should consider signing their child up for a Trump Account, also known as a 530A account. Babies born in this window will receive $1,000 in seed money from the federal government for these accounts. You can sign your child up via the online portal or by filling out Form 4547 when you file your taxes. 

A 530A is another investment bucket for families to take advantage of, like a 529 or UTMA account. 

While $1,000 may not seem like a lot to some, Combs stresses that compounded over time, this can turn into a pretty meaningful amount. “I definitely encourage people to take advantage of it,” she says. “It’s free money, and I like free money.”