10 Money Moves to Make Before Your Baby Arrives
In the. next couple months, me and my husband and I will be welcoming home our first child. Even though preparing for a baby is one of the most exciting seasons of life, it can also bring a lot of financial questions. Between doctor visits, baby gear, and planning for time away from work, the costs can add up quickly.
The good news is that a little planning now can help you feel more confident and in control once your baby arrives. Here are 10 smart money moves to make before your baby is born to help your family start this new chapter on solid financial ground. I’ll also be sharing how my husband and I are implementing each of these moves to make us more confident during this journey.
1. Review Your Health Insurance
One of the biggest expenses related to having a baby is healthcare. Take time to review your health insurance plan and understand:
Your deductible
Your out-of-pocket maximum
What prenatal care and delivery costs are covered
I found out I was pregnant right before it was time to renew my insurance at work. I set up some time with my benefits representative to understand my prescription and delivery costs. Knowing these numbers can help you estimate how much you may need to pay during pregnancy and delivery. Since I have a high risk pregnancy, there’s a significant number of doctor’s appointments I have compared to a traditional pregnancy. Also, I had additional tests taken that had a cost to them, too.
One thing I was not able to account for were prescription denials from my insurance. Although I spoke to my insurance company about specific prescriptions and they said only a provider referral was needed, when the provider gave the information it was still denied. This was very stressful and we decided not to move forward with the prescriptions. It was unfortunate, but it’s something to keep in mind in this process.
2. Plan for Maternity or Parental Leave
Many families are surprised by how much their income changes during maternity or parental leave. This fluctuates a lot for every company. Set up time with your human resources (HR) department to know the steps you need to take. One thing I didn’t realize is that in the U.S. you need to have at least 12 months of short-term disability paid before you can use it.
Ask questions like:
Will your leave be paid, partially paid, or unpaid?
How long will the leave last?
Will benefits like health insurance continue during this time?
Once you know the answers, calculate how much income may be reduced and start preparing now. I first met with my supervisor to make him aware. I then had 2 appointments with my HR team. My first appointment was to understand the company’s internal processes. This is when I received answers to the above questions and shared the information with my husband. A part of this process it that I had to enter my approximate time I would like to be on leave.
The next appointment was to complete the paperwork to receive short-term disability. A section of this paperwork had to be completed by my provider. Remember to leave time for this paperwork to be approved so you can have peace of mind while on leave. Your HR department should be able to provide guidance on timing. Ask about your company’s paid leave policy. Although my role is secure due to FMLA policies, I won’t be paid during that entire time. Find out what your company provides and plan from there.
3. Build or Strengthen Your Emergency Fund
An emergency fund becomes even more important when your family grows. The median amount that most people in the U.S. have is about $500. That barely even covers 1 week of essential expenses for most households. If possible, aim to save 3–6 months of essential expenses. This fund can help cover unexpected costs such as medical bills, home repairs, or income changes. Even if you can’t reach the full amount before the baby arrives, every dollar saved adds financial security. It takes intentionality to build an emergency fund, with or without a baby in the picture.
What’s your family policy when it comes to emergency funds? Do you keep it full or is it one of those things you’ll get to when you “get a chance”? An emergency fund isn’t one of those things you can wait to fill, especially with a baby on the way. Also, in this current job market, things can change so quickly. You need to be prepared to protect your family. As I’m prioritizing my emergency fund, there are some factors I am keeping top of mind:
Instability in my company
Possible housing changes
Insurance coverage
Family health
4. Create a Baby Budget
Babies don't have to break the bank, but it helps to plan ahead. These are the things you know you’ll be purchasing regularly and need to account for along with your weekly grocery list. Having this budget will help to prioritize necessities when social media ads and influencers are constantly pushing “must-have” products in your face. Identify what’s important to you. There’s nothing wrong with getting some nice things for baby, but you have to determine what really matters. Those little items can definitely add up quickly. The amount of baby and mommy items that show up on my feed are ridiculous! From bassinets to baby bags, I’m shown so many items I would’ve never thought to purchase on my own.
Common expenses include:
Diapers and wipes
Formula (if needed)
Baby clothes
Childcare
Medical copays
Creating a simple baby budget helps you anticipate costs and avoid financial surprises. We know things are going to come up, but that’s where this budget comes handy. Then if there’s anything additional, your emergency fund is there to pick up the slack. Just be sure to refill the fund and adjust your budget to account for it in the future.
5. Pay Down High-Interest Debt
If you’re carrying high-interest debt, such as credit cards, this is a great time to make a plan to reduce it. I consider high-interest debt to be anything over 10%. This should be a priority with or without a baby. High-interest. debt eats away at your wealth. You can’t prioritize investing, saving, or just enjoying your money when high-interest debt is in the picture. Nine months goes by really fast when attempting to pay off debt.
Lower debt payments mean:
More flexibility in your monthly budget
Less financial stress during parental leave
More room for new baby-related expenses
I’m not carrying any high-interest debt, but I still have student loans with interest rates between 4.5-5.8%. I’ve used ChatGPT to create for me a debt payoff plan that I’m using as a guide. The key is to be intentional. Some people think you need to take big chunks out of a loan to have an impact. However, even small extra payments can make a difference. Create a plan and automate payments to make it easier to execute. You got this!
6. Review Your Life Insurance Coverage
Insurance is a controversial topic. It seems unnecessary until you actually need it. Once you have a child depending on you financially, life insurance becomes an important safety net. We can’t plan for everything. Life insurance is that extra coverage to take care of your new dependent , just in case something happens. This is an item that’s on my own checklist for baby prep. We’ll be taking care of this as a part of the first 6 months of settling in with baby.
Term life insurance is often the most affordable option and can help protect your family financially if something unexpected happens. A general rule is to have coverage that equals 10–12 times your annual income, though everyone's situation is different. Consider the options to consider for a dual household, too. My husband and I are doing our research and keeping our options open when it comes to life insurance policies. Whole life insurance is an option too. It may not make sense to have whole life insurance when you also have higher expenses like daycare. Before making a final decision, compare pricing, duration, and you personal needs to determine which type to get.
7. Update/Create Your Will or Trust
It’s not always the most comfortable topic, but creating a will is an important step for new parents. A will is a legal document detailing asset distribution after death. If you own any property, my suggestion is to complete an estate plan instead of a will. A will provides basic coverage. However, depending on your state, a will still forces a family to go through the probate process. Probate involves going through a court process and sharing court information publicly.
A trust takes the estate planning process a bit farther since it actually holds assets, takes effect immediately, and avoids probate. The privacy factor alone is the reason I lean towards a trust instead of a will. Keep in mind, a trust is usually more expensive than a will and a lawyer is needed to complete the paperwork.From the lawyers I’ve spoken with, most complete the paperwork for $2-5k.
A will:
What it does: Says who gets your assets after you pass away
When it takes effect: Only after death
Covers: Property, guardianship of children, final wishes
Court involvement: Goes through probateA trust allows you to:
A Trust:
What it does: Holds and manages your assets during your life and after death
When it takes effect: As soon as it’s created
Covers: Assets placed inside the trust (home, accounts, etc.)
Court involvement: Avoids probate
Do your research to determine which is best for you. But either way, this step can bring peace of mind knowing your family is protected.
8. Start Thinking About Childcare
Childcare is often one of the largest ongoing expenses for families. From my initial research, daycare in my area tends to fall in the $1500-$1800 range for an infant. As the child gets older (typically after 2 years old) the price decreases significantly. That’s higher than the mortgage for my condo! There’s a lot of options available, but the expense is something that should be planned rather than going into haphazardly.
Winnie.com is just one example of a website that is basically a registry of local daycares. This includes home facilities, too. Care.com has a comprehensive list of everything from nannies to daycares to preschools. I actually was a babysitter through care.com when I was in my 20’s. I love that they only allow caretakers who have background checks to be on their site. Some daycare centers also have waitlists, so planning ahead can help you secure a spot and budget for the cost.
Start researching early. Below are a list of just some of the childcare options to consider.
Daycare centers
Nannies
Family support
Part-time care
For me, my husband and I are considering daycare centers and family support options. Although I work from home full time, there’s no way I can have a newborn at home and work full time. I’ve heard of some people doing it, but I’d highly advise against it. We’ve also been talking with family to see if they would like to be a part of the care rotation, too. Both of our moms are retired, but we don’t want them to feel obligated to care for our child.
Bottom line: make a plan early and communicate with your caregivers to ensure that once you’re ready there aren’t any gaps.
9. Automate Your Finances
Life will get busy once your baby arrives, so setting up automated systems now can make things easier later. With or without children, automating your finances should be a top priority. I have to admit that when I wasn’t really tracking my finances the thought of automating them was really scary. I chronically overdrafted my checking account. Only once I got a handle on my finances was I comfortable beginning to automate them. Do this first.
Next, I charge as many bills as possible on my credit card. Then I pay them off each month so I don’t carry a balance. It is with the combination of automating and credit cards that is the base of my personal financial system. When it comes to baby expenses my goal is to follow the same plan. Random baby expenses are guaranteed to come up. Automating these expenses will allow you to focus on baby and less on bills.
Consider automating:
Bill payments
Savings contributions
Debt payments
Automation ensures your finances stay on track even during sleepless nights and busy days.
10. Start a Long-Term Savings Plan
You don’t have to start with a huge amount, but beginning early can make a big difference over time. Just like compound interest, it gets better with time. Creating a 529 college savings plan was one of my priorities once I found out I was pregnant. I had the choice between my state’s plan and an option from Vanguard. I chose my state’s plan since it was the only option that had tax benefits. Do your research to discover which options work best for you.
Typically you only need a social security number to get started. But once you do, you can open the different account options below in your child’s name. I also suggest sharing these accounts with your family members and friends so they can contribute as well. I’m sure they’d love to be a part of your child’s future.
Options to consider include:
A 529 college savings plan
A custodial investment account
A general savings account for future expenses
FYI: Some states allow for a 529 account funds to be used for K-12 tuition and even uniforms.
Final Thoughts
Welcoming a baby into your life is a beautiful milestone. While the financial side can feel overwhelming, taking a few proactive steps now can help reduce stress and build a strong foundation for your growing family.
The goal isn’t perfection—it’s preparation.
By making intentional money moves before your baby arrives, you can focus more on what truly matters: enjoying those first special moments with your new addition. I’m doing the same . I wish you the best!
