
Three Ways Babies Change Family Finances
Mar 31, 2025 | 1 min. read
Discover financial planning matters to address as your family grows.
If there's one thing most military parents agree on, it's that there's no ideal time to have a baby, especially when you’re trying to plan for a baby around one or two active-duty careers. One good way to help ensure that your family is ready to grow is to have a financial plan in place – and understand how it will change once you’ve added to your family. Here are three ways you can expect your finances to change once baby arrives.
1. Your Monthly Budget Will Change
A monthly budget tracks how much money comes into your household (income) and how much money goes out (expenses). These numbers are almost guaranteed to change once you bring your baby home, so you’ll want to anticipate them and prepare in advance.
- Income
This can be one of the biggest hits your budget will take, especially if one parent will stay home indefinitely to care for the baby. Even with both parents returning to work, temporary loss of income due to lapses between the end of paid parental leave and returning to the workplace can seriously impact your ability to bounce back financially from having a child. - Expenses
Who knew such a small person could cost so much? In addition to an increase in larger, one-time purchases (think bassinet, crib, toddler bed, stroller, car seat, etc.), you’ll also need to account for recurring expenses like diapers, wipes, formula, and baby food. Childcare is another significant cost to consider. Even DoD childcare centers, often one of the more affordable options, have a sliding fee structure that depends on total family income, so as you advance in your career or your family grows, your childcare expenses can rise. To keep your budget on track, take proactive steps to reduce your family’s expenses.
If you aren’t already following a budget, be sure to learn about this powerful financial tool. It can help you gain a clear understanding of your income and expenses, avoid spending more than you earn, and work toward future goals.
2. You’ll Need a Bigger Safety Net
Hopefully, you already have an emergency fund in place to cover unexpected costs like a car repair or medical expenses. Now that you’ve added to your family, you’re going to need a bigger safety net. Consider increasing the amount you contribute to your emergency savings. If you’re not sure how much you should save for emergencies, your Financial Advisor can provide guidance based on your family’s unique situation.
3. You’ll Need to Update Your Life Insurance
Life events like marriage or the birth of a child are optimal times to review the beneficiary information on your Servicemembers' Group Life Insurance (SGLI) and supplemental life insurance policies. Ensure all information is up-to-date and review your coverage with your Financial Advisor to make sure your growing family is protected.
Your Advisor Is Your Financial Planning Resource
As your family grows, a knowledgeable financial coach can help ensure your financial plan evolves with your changing circumstances and goals. Be sure to connect with your Financial Advisor when significant family or life milestones occur. And if you don’t already have a financial plan in place, an Advisor who understands military life is uniquely suited to helping you get started.
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