What a Wealth Manager Recommends When You’re Having a Baby (From a Dad of Two)

Financial planning for a new baby is something I think about both as a wealth manager and as a dad of two. We recently welcomed our second child, so this comes from experience. This article covers the main things I recommend new and expecting parents think about: insurance, documents and estate planning, budgeting, saving for a child, taxes, and the non financial side of the transition.

Life insurance and disability insurance for new parents

When you become a parent, you are building a safety net for your family as well as yourself. If you do not already have life insurance, now is the time. Everyone’s situation is different, but I typically recommend term life for 20 to 30 years, which is meant to cover future expenses like college, the mortgage, or income replacement. Keep in mind that your employer’s coverage is rarely enough.

Disability insurance is the one people often overlook. Your income is your greatest asset, and if you cannot work for 6 months or a year because of injury or illness, disability insurance keeps everything afloat. Review what your employer provides and supplement it if needed.

Health insurance is simpler. Add your child to your health plan right away.

Documents and estate planning after having a baby

Apply for a Social Security number for your child, and a passport if you plan to travel. Then update your estate plan or will to include your child and name a guardian. It is not fun to think about, but it is one of the most loving things you can do.

Beneficiaries are easy to forget too. Make sure your retirement accounts and insurance policies have the right names listed.

How to budget for a baby

Kids are expensive, but not in the ruin your life way the internet sometimes makes it sound. It is more about intentional planning. The Baby Budget Calculator from The Bump is a good resource for a realistic sense of upfront and monthly costs, including diapers, childcare, gear, and healthcare.

When we had our first, I was surprised that we were spending differently as well as spending more. You eat out less, travel differently, and maybe upgrade the car or move homes. So the first step I walk clients through is revisiting the budget and cash flow. Build in the new recurring costs, such as formula, diapers, daycare, clothes, and doctor visits. The goal is to adjust expectations so you stay in control.

529 plans and custodial accounts for your child

• 529 college savings plan. Even if you start small, say $50 a month, time is your biggest advantage. Compounding over 18 years can add up, and certain states provide a tax benefit for funding a 529.
• Custodial account. These accounts are owned by your child but managed by a custodian, typically the parents, until the child reaches a certain age. They work well for grandparents or relatives who want to gift money for the child’s future.

Tax benefits to look at when you have a child

If your employer offers a Dependent Care FSA, it can save you thousands in taxes on childcare expenses. An HSA can help as well if you have a high deductible health insurance plan, since it is triple tax advantaged.

There are also a lot of small tax nuances with kids, such as child tax credits, dependent care credits, and adjusting your W4 withholding. This is a good time to loop in your CPA or advisor.

Parental leave, childcare, and the non financial side

Wealth management goes beyond spreadsheets and returns, so a few items on my list have little to do with money.

• Parental leave and childcare. Figure out how long you or your partner will be home and what childcare looks like when you go back to work. Interview nannies early, tour daycares, and get on waitlists, because they fill up fast.
• Shopping and registry. Babies grow out of everything faster than you expect. Borrow where you can and buy quality where it matters.
• Big life conversations. Having a baby changes your identity, your schedule, and your priorities. Talk with your partner about roles, values, and long term goals.
• Mental health. Sleep deprivation and lifestyle change are real. Whether it is therapy, parent groups, or time with friends, invest in your emotional health too.

You do not need to do everything overnight. Even one or two steps a week makes a real difference. After our first, we also set a financial goal just for annual family trips, a reminder that money is for joy as well as protection.

Common questions

What kind of life insurance should new parents get?

Everyone’s situation is different, but I typically recommend term life for 20 to 30 years. Employer coverage is rarely enough by itself.

When should I start a 529 plan for my child?

Starting early helps because time is your biggest advantage. Even a small amount like $50 a month has 18 years to compound.

What financial steps should I take right after having a baby?

Add your child to your health plan right away, apply for a Social Security number, and update your estate plan or will to include your child and name a guardian. From there, work through the rest a step or two each week.

VDB Wealth is a registered investment adviser. Information presented is for educational purposes only and is not intended to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Past performance is not indicative of future performance.

Hey everyone, Andy VandenBerg here, founder of VDB Wealth, and more importantly, a dad of two. We just welcomed our second child, and like any big life transition, it’s been a mix of joy, chaos, and a few sleepless nights.

As both a wealth manager and a parent, I thought I’d share what I recommend financially when you’re growing your family, not from a theoretical standpoint, but from experience.

There’s a lot that changes when you have a child, emotionally, logistically, and financially, and getting your financial foundation right gives you space to focus on what actually matters.

So let’s go through the big things I recommend every new parent think about, from insurance and estate planning, to budgeting, childcare, and even emotional health.

Let’s start with the basics: your safety net.

When you become a parent, you’re not just responsible for yourself anymore, you’re building a safety net for your family.

Life insurance. If you don’t already have life insurance, now’s the time. Everyone’s situation is different, but I typically recommend term life for 20 to 30 years, something that covers future expenses like college, the mortgage, or income replacement. And remember: your employer’s coverage is rarely enough.

Disability insurance. We often overlook this one, but your income is your greatest asset. If you can’t work for 6 months or a year due to injury or illness, disability insurance keeps everything afloat. Review what your employer provides and supplement if needed.

Health insurance. Add your child to your health plan right away. Some parents forget this step, and it’s easy to do in the haze of newborn life.

Documents. Next, apply for a Social Security Number and passport if you plan to travel. And update your estate plan or will to include your child and name a guardian. It’s not fun to think about, but it’s one of the most loving things you can do.

When my wife and I had our first, I remember how overwhelming those early weeks felt. Updating our estate plan was not on my mind, but it gave us both a sense of peace once it was done. With our second, it was one of the first things I revisited.

Now let’s talk financial planning.

Kids are amazing. They’re also expensive, but not in the “ruin your life” way the internet sometimes makes it sound. It’s more about intentional planning.

A great resource is the Baby Budget Calculator from The Bump, I’ll link it below. It gives a realistic sense of upfront and monthly costs: diapers, childcare, gear, healthcare, and more.

When we had our first, I was shocked at how costs shifted, not just more spending, but different spending. You eat out less, travel differently, maybe upgrade the car or move homes.

Here’s how I guide clients through this:

Revisit your budget and cash flow. Build in new recurring costs, formula, diapers, daycare, clothes, and doctor visits. The goal isn’t to cut fun, it’s to adjust expectations so you stay in control.

Start a 529 College Savings Plan. Even if you start small, $50 a month, time is your biggest advantage. Compounding over 18 years adds up fast. Certain states even provide a tax benefit to funding 529s.

Consider a Custodial Account. These are accounts that are owned by your children but managed by a custodian, typically the parents until they reach a certain age. This is great for grandparents or relatives who want to gift money for the child’s future. It’s also a good way to teach kids about investing later on.

Use your FSA or HSA. If your employer offers a Dependent Care FSA, it can save you thousands in taxes for childcare expenses. Same with an HSA if you have a high deductible health insurance plan, it’s triple tax advantaged.

Loop in your CPA or advisor. There are a lot of small tax nuances with kids, like child tax credits, dependent care credits, or even adjusting your W4 withholding.

Update beneficiaries. This one’s easy to forget, make sure your retirement accounts and insurance policies have the right names listed.

After our first, we also created a specific financial goal that isn’t for emergencies or college, but for annual family trips. It’s a nice reminder that money isn’t just protection, it’s also for joy.

Now, let’s talk about the non financial side, because wealth management isn’t just spreadsheets and returns.

It’s about designing a life that’s sustainable and intentional.

Parental leave and childcare planning. Figure out how long you or your partner will be home, and what childcare looks like when you go back to work. Interview nannies early, tour daycares, and get on waitlists, they fill up fast.

Shopping and registry. Don’t go overboard. Babies grow out of everything faster than you expect. Borrow where you can, buy quality where it matters. You’d be amazed at what you can find from other parents on Facebook Groups.

Big life conversations. Having a baby changes your identity, your schedule, and your priorities. Talk with your partner about roles, values, and long term goals. For us, the biggest shift was redefining how we manage time to still be our own individual within a bigger family unit. That structure matters more than ever.

Mental health. Don’t underestimate this. Sleep deprivation and lifestyle change are real. Whether that’s therapy, parent groups, or time with friends, invest in your emotional health too.

If you’re a new or expecting parent, congratulations.

It’s one of life’s biggest transitions, and getting your financial house in order can help you be more present for the moments that matter.

I’ve linked the checklist in the description below.

Don’t stress about doing everything overnight, just start. Even one or two steps a week makes a huge difference.

If there’s one thing I’ve learned, it’s that no spreadsheet captures how quickly the years go. The best financial plan is the one that frees you to actually live your life, to be present for bedtime stories, walks, and Saturday mornings with your kids.

That’s what I want for every family I work with.

At VDB Wealth, we help families like mine navigate these transitions, not just the investments and taxes, but the life side of money.

If you’re preparing for a new baby or want to make sure your financial plan is aligned with this next chapter, feel free to reach out.

And whether you’re expecting your first or chasing your second like me, remember: the best investment you can make right now is your time and attention.

Thanks for watching, and congrats again on growing your family.