Nine tips to manage your money as you start a family

By | January 25, 2013 | Finance & Career

Nine tips to manage your money as you start a family

As a woman, you’ll go through many life stages. Some stages will require you to completely change your financial plan while others will require just small adjustments to the strategy. If you’re a woman just starting your family, here are some helpful tips to consider as you navigate through this new life stage.

1.   Review your spending plan.

As you know, having a child definitely changes your cash flow. New expenses associated with having kids such as diapers, formula, and child care all need to be calculated and factored  into your spending plan. The goal is to make sure you can afford these additional expenses and still save for your goals. You may have to make some sacrifices so it’s important you and your spouse discuss what areas to cut back on if needed. As your children grow, continue to review your spending plan on a regular basis to ensure you are keeping up with all the changing expenses of your child, i.e. child care, day care, school tuition, after school activities, etc.

2.   Decide on childcare.

Are you planning on going back to work after your baby is born? If so what type of  childcare will you need?  About 55% of women return to work within the first 6 months of having a baby, which means most women will have to factor childcare into their spending plan. Depending on where you live and what type of care you choose, full-time day care for an infant can range from  $4,560 – $18,773 annually!

You’ll also need to consider the legal aspects of hiring help. Lisa Pierson Weinberger, attorney and owner of states, “Whether you’re about to have or adopt a baby, thinking about childcare or preparing to return to work, there’s a whole range of employment-related legal issues to consider.” She helps women in this stage understand the legal issues of childcare and ensures they are protecting themselves, their family, and their assets.

3.   Review your health insurance.

Before you have a baby, make sure you understand how much of your childbirth costs are  covered by your current health insurance plan. Once your baby is born, make sure to add your child to your health insurance plan.

4.   Get life insurance.

Once you have brought your little bundle of joy into the world, make sure he is protected financially if something should happen to you or your spouse. Get life insurance to cover the survivor’s income needs and ensure you are adequately covered based on your current financial situation and financial goals.

5.   Adjust your tax withholdings.

Now that you’ve just added another dependent to your tax situation, work with your tax professional to confirm you’re withholding the proper exemptions on your paycheck.

6.   Claim all your credits.

Take advantage of all of the tax breaks available to families with children. The child tax credit, adoption credit and childcare credit are some of the common credits now available to you. All of these credits have special qualification rules so work with your tax professional to understand which ones, if any, apply to you.

7.   Start a college fund.

Talk with your spouse about what your goals are for your child’s education. Do you want to afford private K-12 schools, save for their college costs, or both? Determine the potential cost of school and how much money you can realistically save toward their education goal.

If you can’t maximize your own retirement savings and put away money for college, it’s more important to save for retirement, as loans and scholarships can help pay for higher education. Consider opening up an education fund (Coverdell, 529, etc) and have family members contribute to these plans if you cannot. Birthdays and holidays are a good time to redirect any monetary gifts into your child’s education fund. Work with a financial planner for more information on these types of accounts.

8.   Get estate documents in place.

Work with an estate planning attorney to get the proper estate documents in place to name a guardian for your children and protect them in the event of your death. You don’t want guardianship issues to be settled in court if anything happens to you. Naming a guardian to care for your children after you’re gone is a very difficult choice, but one you shouldn’t procrastinate any longer. Get your estate documents in place and protect your loved ones.

9.   Teach your children about money.

Include your kids in the family’s financial discussions as soon as they are old enough to understand. For younger kids, between 1-5 years old you can set up 3 piggy banks for their money: one for saving, one for charity and one for spending. For kids ages 6 and up, you can begin giving them an allowance and treat it like a paycheck. Every two weeks pay them an allowance and perhaps offer “bonuses” (more allowance money) for any additional chores they do around the house. Then take them to the bank and open a savings account for them and encourage them to start saving 10-20% of their money. You can also decide to match any money they save on their own, just like an employer would match your 401k contribution. This is a great way to show them how to strike a balance between saving and spending.

Remember, a little financial education can go a long way to help shape your children into
financially savvy adults.


1.  U.S. Census Bureau. (2008, February). Maternity leave and employment patterns of first time mothers: 1961-2003. Retrieved April 15,2010.

2.  Data provided by Child Care Resource and Referral agencies in 2009/2010.

What major financial changes did you make when you started a family? 

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Brittney Castro

Brittney Castro, CERTIFIED FINANCIAL PLANNER™, entrepreneur and personal finance expert for women, is the Founder & CEO of Financially Wise Women, a Los Angeles based financial planning firm for women. She specializes in working with busy professional and entrepreneurial women who are passionate about life and want to gain clarity around their money. Brittney’s mission is to help women plan and create the life of their dreams, free from anxiety about money. She is known for her innovative, non-judgmental, compassionate approach to financial planning. She has been featured in the Wall Street Journal, New York Times, CNBC, Financial Planning Magazine, Investment News, and Registered Rep Magazine. Away from the office, you can find Brittney working out, drinking green juice, reading, playing at the park with her dog Arya and of course dancing. Sign up to receive your Financially Wise Toolkit jam packed with great tools and resources to help you on your financial journey at Follow @BrittneyCastro on Twitter.

tell us what you think


Curtman40 March 21, 2013 at 10:51 am

The key to teaching your children about money is your ability to keep it, when they see you have money they will understand how to keep it, but if you are making mistakes with it then they will do the same.

Joeywall87 April 21, 2015 at 2:42 pm

In the end parenting is helping kids grow up to be well educated adults. I think that one thing you really should teach your kids when they can understand a bit more, is the estate plan for them, if anything every happens to you. You don’t want them to be manipulated  with the money you left them when they get older.