New Parents' Guide to Finance


5Z8QJ8SIHD Great news, congrats! You’re gonna be a parent soon! You must be thrilled (and likely worried out of your mind!)

Everyone gives advice, regardless of your wishes not to hear it. Here's how to make sure that the baby learns to sleep well! Here's how you save on diapers! There is this awesome trick I know to potty-train the baby - at 6 months!

So while your head is spinning from logistics (we need a bigger place, a nanny, grandma's coming in from Phoenix, time to tell my boss), you're likely to forget the basics - how to plan ahead and pay for Mini-Me.

While you may think that costs are always unexpected (which is partly true), the good news is that the two of you control the show.

Here are the keys to mastering your finances with your baby in tow:


1) Take common-sense (and not-so-common-sense) precautions to reduce financial risk for your family.

a. Take out a reasonably valued life insurance policy for each of you (parents) based on your lifestyle. You never know what can happen, but if it does, G-d forbid, at least the other spouse will not be left in a complete free-fall while raising a baby on his or her own.

b. Put aside a rainy day fund of 6-12 months of (your combined) salary. What if one of you gets fired or decides to quit a job?

c. Review and update (or create) your financial plan to understand your current spending and project increases in what you will need to spend with the baby around.

Budget appropriately for formula and other food, clothing, daycare/nanny, stroller(s), transportation, decreased income (due to time off for Mommy and/or Daddy). Don't be caught off-guard.

Project out the costs (lost income and/or benefits) of staying at home vs. returning to work, how long each of you can stay at home with the baby.

d. Take the opportunity to reviews your finances and taxes to maximize all advantages, whether by earning points from your credit card purchases, maximizing your employer's 401(k) or Roth IRA contributions, negotiating down fees and recurring expenses (phone, internet, cable).

Here is a previous post on **12 Steps to a Comprehensive Financial Strategy**.

Ramit Sethi also gives a great primer on optimizing your finances here.

e. Go into the birth with clear eyes about how you will pay for what and where the money will come from. Have a safety cushion and hedge your risk appropriately. Don't be caught off guard by "circumstances."


2) Adjust your tax status when filing taxes and make sure to take advantage of the extra exemptions, child tax credits and child care expenses through pre-tax FSA (flexible spending account) and HSA (health savings account) contributions.

Don't miss out on the major tax advantages of having a kid. Plan ahead for the extra expenses and do your best to take advantage of pre-tax contributions through available FSAs, HSAs.


3) Start a 529 plan for your kid.

College is insanely expensive and will only keep rising in cost, so start saving and investing for it ASAP. Start here before you sign up to understand growth expectations, budgeting and which expenses are included and which are not when it comes time for your kid to spend the money on college.


4) Adjust your health insurance coverage to cover your baby ASAP.

Purchase any additional types of insurance, as necessary, for you and/or your kid. Choose your plan based on your projected needs. Consider starting an HSA (health savings account) at work to put aside pre-tax money to pay for any projected medical expenses, as necessary.


5) Don't run to keep up with the Joneses (or Patels or Ivanovs). **Have your own ideas about what's important for your kid to have and what's not important.**

Discuss your parenting approach and the principles you will put to work when raising your baby.

Communicate constantly with each other and be open about any hangups or reservations you may have with the other person's approach! Hash it out and pick your battles. This process is especially critical if you come from different cultures/countries and types of family.

If you're just "winging it," you'll end up spending tons of money on material goods when experiences are much more valuable - both for baby and for you.

Ask your parents how they raised you, what toys and books you had. You'll always learn a lot when you dig into what worked for them (and didn't) when raising you. You will find that less is always more and simpler is always better.


6) Everything is always negotiable. NEVER pay retail (but go to high-end stores to get great ideas for what toys, clothing and other things you want to buy for your kiddo). Always ask for a discount. Worst case, they say no. You'd be surprised how often people are willing to bargain, even on basic goods.

Borrow from, barter and/or swap with friends or neighbors, if you can. This works well, especially if friends or neighbors are at a different stage of life with their kids and have toys, clothing, books or other things that they no longer need (or don't need for now, when you need it).

Comparison Shop. Always check prices on Amazon, Craigslist and E-Bay, as well as local Mommy groups and baby-themes swap events.

Just because you love your baby to pieces doesn't mean you should drop your common sense when shopping for clothing, toys, diapers, books or anything else. Don't lose your head and always think like a rational, intelligent adult!

A free or cheaper version is (almost) always available when you want to buy something expensive. Use to set recipes to watch Craigslist for items you want (whether a fancy stroller, toy you really want for your kid, extra formula or anything else).

Always do your research about what others say about solving your particular problem ahead of time, especially before making big purchases.

Buy in bulk when you can - but avoid buying every item you need in bulk. Here's a good guide on what you should ad should NOT buy in bulk.


7) No difficult situation you encounter is a completely new situation.

Someone, somewhere (likely in your town or neighborhood) has been through it before and knows how to solve the problem better, cheaper and/or faster than you know. Read and do your research. Crowd-source. Ask your friends, neighbors and colleagues. You will be pleasantly surprised how often people are willing to help out materially or with useful advice from their experience to help you solve problems better, faster and/or cheaper.


8) Simpler is always better.

Babies don't appreciate when something is expensive. They DO appreciate (and play more at a time with) a toy or other object when it's truly interesting and engaging, which has no correlation with price. When you were growing up, you didn't have any electronic gadgets, a thousand teddy bears or other distractions. Odds are, especially if you grew up in a poor country, you had even less and still turned out just fine in terms of curiosity, intelligence and motivation:)

As you will see, a kid is often more engaged and joyful when playing with a simple box or step-stool, spoon and fork, basic building blocks and shapes, anything with many colors and sounds/words, rather than when playing with an iPad or electronic device.

Stop your kid and show him or her flowers, insects, trees, leaves, cars, people. TALK to your kids! Teach them as many words as possible. Don't flood them with toys, but with experiences they'll cherish for the rest of their lives.

Also, LISTEN to your kids and encourage them to tell you what they see and experience! This is far more valuable than outsourcing to a voice on a machine or even a nanny.


9) Start a baby registry ASAP.  Advertise widely among your family, friends and colleagues. Don't be shy - this can really help defray costs and help friends and family feel involved and invested.


10) Ask for help from family to cut down expenses from baby-sitting, clothing, etc., as needed. Consider swapping group baby sitting time with friends, neighbors and family.


11) Know your rights under the Family and Medical Leave Act (FMLA), listed here. Have a good Employment Law attorney ready if your employer gives you trouble about the FMLA or fires you despite your rights thereunder.

  • **Both mother and father** are entitled to FMLA leave for the birth of their child, or placement with the employee of a child for adoption or foster care.


12) Get help from a Certified Financial Planner (CFP), financial adviser and/or tax attorney to plan out the tax implications of having a baby, as well as for any questions about a will, setting beneficiaries, cash gifts to the baby and any other related foreseeable events.

It's worth the time and money now and better than scrambling later, because your house is not in order.


13) Invest in experiences more than in material goods.

Take great (real, long, engaging, truly restful) vacations. Your spouse and kid will appreciate it much more than more crap accumulating around the house.

Get a babysitter and go on dates! Keep investing time and efforts in your marriage. After all, isn't this why you married each other?


Now drop the worries, make a plan and talk to your spouse about your goals and strategies to raise your kid like you want. You'll be surprised about what you agree and disagree about. As parents ourselves, we'll be rooting for you!

**And , as always, if you have any questions at all, get in touch!**

Are there other important strategies you’ve used to get your finances in order for when baby comes? Please share them with the Community in Comments below. We’d love to hear from you!

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Like what you see? Visit for more great strategies and tips for better health and wealth, plus improved productivity.

Follow us @Blueprint2Thriv

Yuri Kruman is a Healthcare Product Manager, published author, blogger at and health tech entrepreneur based in New York.

*The views expressed herein are his own*

12 Steps to a Comprehensive Financial Strategy

KQWMZQ7W1C (**Disclaimer**: nothing in this post should be construed as financial or legal advice or endorsement of any financial or other product or company. Consult a certified financial adviser or planner for professional advice. Regardless, you should always do your research and avoid biased sources. All opinions herein are solely my own.)

The trouble with financial advice is that it comes from all over the place - your parents, your siblings, your friends, your bank, your landlord, your super, ten different apps, you name it. How do you know whom to trust?

First of all, don't (readily) trust those people who 1) don't know your full financial picture and/or who 2) are motivated by profit from you, not your true financial well-being. That would mean developing skepticism at what's offered by almost every financial institution you deal with, including banks, financial advisers, mutual funds, etc. They all generally profit through fees, regardless of whether your money grows or shrinks while in their hands.

Ok, but who's left to trust, then? Trust those people who have their finances together and have applied the appropriate strategy for them and their family to effectively protect against risk in a world of complex financial instruments, wild market swings, rising expenses and uncertainty.

That would mean educating yourself about what works best for someone in your particular situation, reading the work of people who are not selling you specific products, but a strategy that makes sense for you, given your current financial circumstances.

The key to creating a comprehensive and well-calibrated financial strategy is A) diagnosing the full picture, 2) appropriately gauging the risk of certain events relevant to your age, family situation, standard of living and 3) counteracting that set of risks by covering yourself with the appropriate types of insurance, reserves and creating a plan of action in case of certain emergency scenarios.

Without further ado, here's how it's done:

A) Open your eyes. Get your head out of the sand. Money is a painful and difficult subject for most people. 

BUT, know that worrying about money kills your health and far too many marriages and relationships. Let it sink in that you can't "just get by."

Stop avoiding the subject. Bite the bullet. Start with baby steps.

Go to (or another, similar money management tool that you can use easily and often) and set up an account, if you haven't already. Set up all your bank accounts to feed information to Mint. Set up all your student loans, credit cards and other debt to feed information there.

Don't become obsessed with your Net Worth figure. It can be dispiriting or illusionary, depending on whether it looks good or bad to you.

Once you have a clear picture of your assets and your liabilities, you can move on to crafting a strategy that makes sense for you. This includes doing careful research (avoiding biased sources) and asking for advice and help from professionals that have no stake in selling you certain products and just want to help you create a sustainable, well-calibrated plan.

Map out your monthly cash flows (ex: $10K salary in, $3K for rent, utilities and internet, $2K for student loan payments, $1K groceries and restaurants, $500 entertainment, $1000 credit card bill, $2500 to savings, etc.) Now you have what you need to start budgeting in order to reach your goals. Diagram how much exactly you take in, from where and at what time in the month / year, as well as what bills you pay and when and how much money you spend on specific categories. Software like Mint will help you categorize your purchases and other spending more carefully and consistently.

B) Start Saving and Investing ASAP, if you haven't started already. Timing is everything if you want your money to grow and work for you. The earlier you start, the more your money will accrue in a shorter time. 

For example, starting to save and invest at 22 for 10 years will earn you more interest than if you start at 32 and invest for 30 years. Let that sink in. Timing is everything. Start ASAP.

C) Create a list of goals for the next year, 2 years, 3, 5 and 10, as well as 20-30 down the road, for retirement. Do you plan to save for a long-awaited vacation? Are you planning to get married in 2 years? Do you want to buy a house in 5 and need 20% down payment? Do you want to send your kids to college in 15 years? Do you want to retire at 55 and travel around the world?

**Write down your goals** and place them in a visible place (fridge / work desk, etc.) It helps to remind yourself what you're working for on a daily basis.

Be as specific as possible with your goals - as in, here is exactly how much I need to save (ex: for my wedding by March of next year (6 months left)). Only when you set specific amounts and time frames will the goal become concrete and will it be easier to automate saving and put it out of mind (and stop worrying).

D) Create a monthly budget that takes into account all your incoming cash and outgoing bill payments and spending.

Be as specific and accurate as possible with categorizing your spending and amounts. It may take a bit of time to perfect this, but start ASAP.

The idea here is NOT to automatically cut down on everything you spend, but at least to see where you can save real money (ex: by buying in bulk, taking your own lunch to work, shifting how much you spend on going out to saving for your dream vacation, etc.)

Optimize your purchases by always 1) price comparing online and 2) finding ways to get what you need for free or less on Craigslist or otherwise on forums, Moms' groups, Facebook groups, church groups, among your friends, etc. There is always a ton of stuff that people want to get rid of because they've grown out of it, it doesn't fit their interior design criteria, they're moving or just getting rid of stuff. Oh yeah, and ALWAYS NEGOTIATE (see item G below).

E) Reduce the number of decisions about money you have to take each month - AUTOMATE! 

For example, set your salary to put the minimum amount into your company's 401(k) plan each month to get the maximum matching amount (FREE MONEY!). Set your checking account to transfer 5% of each paycheck to savings. Open a Roth IRA and automate your contribution from checking each month. If you have kids, open a 529 plan for them and contribute each month.

F) Hedge against the risks most relevant to you.

For example, if you have a family and/or kids, buy life insurance. Consider Identity Theft Protection (a common affliction these days). If you have a medical history of cancer, consider cancer insurance. Look into Short-Term and Long-Term Disability (many employers pay for or subsidize this). If you have a pet, look into pet insurance (yet, that exists).

Look into putting some money into an FSA (flexible spending account) or HSA (health savings account) if you know you'll need the money (tax-free) to pay for things like day care, your commute or expected health expenses throughout the year.

G) Always Negotiate (because everything is always negotiable)! Negotiate on major and minor purchases. Know the best times to make major purchases throughout the year. Negotiate on monthly expenses like car insurance, credit card rates, cell phones and other things by presenting competitor pricing and your leverage as a long-time customer (here's a great run-down of techniques that work for this). Always negotiate to have fees taken off your bill.

H) Monitor Your Credit Regularly to Check for Mistakes and Fraud. My recommendation for a free (yet robust) credit monitoring app is Use it!

I) Pay off your Highest-Interest Debt First, before investing a lot of money (other than 401(k) free money, that is). 

For example, if you have student debt at 8.5% (or credit card debt at 29%), it would take a rather phenomenal (a.k.a. impossible) return on investment before you would be able to beat the interest collecting on your student loans. Use either the Snowball Method or Avalanche Method (here's a good primer on both). Either way, find a way to pay as much as possible per month to eliminate the debt ASAP and to save on interest payments.

Negotiate with your credit card provider to lower your rate or to pay off a lower balance up front. They can be quite flexible sometimes.

Look into refinancing your student debt, but beware losing any deferment/forbearance benefits you may have accrued.

J) Create at least a 6-12 month cushion in savings to maintain your lifestyle at a similar level in case of job loss or major financial loss elsewhere.

K) Once you have your credit card and student (and/or personal) debt on a plan to be repaid ASAP, then consider investing your money in low-fee financial instruments, such as ETFs and index funds. Reduce (or eliminate) the fees you pay a financial adviser by considering using a robo-adviser like Hedgeable, Wealthfront or Betterment. Your involvement should depend on what you can reasonable. Your level of risk should depend on both your financial goals, age and risk appetite, as well as how easily you are willing to part with the money, given your overall financial picture.


Negotiate a raise, bonus or other extra perks / compensation using these excellent techniques from Ramit Sethi (trust me, they work).

Do you know a foreign language or two? Translate.

Do you write well? Do copywriting.

Do you freelance as a house painter, baby or dog sitter, consult startups on product strategy, love making jewelry or have another awesome hobby? Offer your services to people you know and online to companies and people willing to pay you for your talents. Then raise your rates.

Perhaps you should even start a business, if you're meeting demand that you know exists for your product and/or knowledge.


Are there other important strategies you’ve used to get your finances in order and thriving? Please share them with the Community in Comments below. We’d love to hear from you!

– –

Like what you see? Visit for more great strategies and tips for better health and wealth, plus improved productivity.

Follow us @Blueprint2Thriv

Yuri Kruman is a Healthcare Product Manager, published author, blogger at and health tech entrepreneur based in New York.

*The views expressed herein are his own*


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