Expanding family

Expanding your family

Growing your family is exciting, but it can also significantly impact your finances. Let us help you achieve a more secure financial future for those who depend on you.

Let us help you establish a sound financial future.

Family financial planning is a great way to increase your peace of mind when expanding your family, whether that means having a baby, adopting, or combining families. Your budget for a baby or new child needs to take into account not only diapers and formula but costs that are on the rise, like child care and college tuition.

Schwab is here to help in the process of financial planning as you start or expand your family. With a wide variety of investment options and a highly qualified team of Financial Consultants nationwide, we can provide comprehensive investment help and guidance in a personal way that's right for you.

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Financial planning and budgeting for a new baby

Adding a new member to the family means added expenses. While the cost to have a baby or adopt varies widely, you can get an idea of how much you'll be paying upfront and out of pocket by asking plenty of questions and adding up the costs:

  • Pregnancy or adoption costs.
    Ask your insurance provider, health care provider, or adoption agency how much you should expect your pregnancy or adoption process to cost. Discuss any likely or high-cost risks that you may encounter so that you can be better prepared.

  • Moving expenses.
    If you'll need to move to a bigger home to accommodate your growing family, factor in down payments or deposits, the costs of moving, and the many fees that add up during the move. Talk to a local real estate professional to estimate the costs to move based on the local laws and cost of living.

  • Insurance premium increases.
    Talk to your health insurance company to find out how much your premium will increase with a new child. Also, take time to assess your level of life and disability coverage, and factor in any costs you’ll incur to increase your coverage.

  • Costs of daily essentials and child care.
    Take time to calculate the costs of daily essentials like diapers, formula, and clothing. Don't forget to also estimate the cost of child care.

  • College savings.
    In addition to budgeting for emergencies, retirement, and investing, you’ll also need to consider how much of your monthly income to allocate to a college savings fund. You can estimate how much you might need with our College Savings Calculator.

Taking all these costs into consideration, spend time now to create or update your family budget. Our Monthly Budget Planner tool can help you calculate your expenses and create a budget. Finally, be prepared to make some cuts. Look for areas of your budget where you can scale back or cut expenses altogether.

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Financial checklist for having a baby

  • Request a Social Security number for your new child.
    You'll need this number to claim a dependent on your income tax return.

  • Update your budget and adjust your spending.
    Factor in costs such as diapers, formula, clothing, child care, and increased medical premiums. Also, calculate the income tax savings your new addition will bring and adjust your withholdings elections appropriately to account for the new child.

  • Make sure your whole family is covered by health insurance.
    Notify your employer's human resources department or your insurance provider of your new dependent. Review your options to get the most cost-effective combination of deductibles and coverage.

  • Consider life and disability insurance in case something happens to you.
    You may want to think about how to replace your income in case you are unable to work due to illness or injury, or, in the case of your death, how to pay off your mortgage and debts, plus provide for your child’s education. If both parents are working, consider dual coverage to replace lost wages and provide child care.

  • Review your beneficiary designations on your 401(k)s, IRAs, and life insurance policies.

  • Create or update your estate plan, including wills and trusts.
    Regardless of your age or net worth, you need an estate plan to protect your family and assets if you die or become disabled. If you have a revocable living trust, ask your attorney about adding your child. Specify who will care for your child(ren) if you become unable to.

  • Start saving for college.
    Consider your college savings plan options and choose an account.


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