Managing Your Wealth While You Grow Your Family: Part 1

By Nicole Young on October 3, 2023

8 Helpful financial tips for expecting parents

While it’s no surprise that having a child isn’t free, the recurring bills associated with becoming parents can be surprising. In the Chicagoland area, the cost of childcare ranges from $1,000-$2,500 per month, with infant and toddler programs having the highest rates¹. Because I’m not a parent, I decided to sit down with colleagues of mine who have recently embarked on this journey to learn more about how they prepared. Greg Williams, Sean Julian, and Delaney Orozco all brought their own expertise in assembling these helpful tips.

Medical Costs:

• Even before the baby is born, medical costs of pregnancy are expensive. A 2022 study found that costs associated with pregnancy, childbirth, and postpartum care cost an average of $18,865 prior to insurance.²
• Because the costs will vary depending on your plan, it is important to understand your coverage. Your co-pays and out of pocket maximums will be important. If your pregnancy spans over two years, the limits will reset.

Daycare Costs:

• If your child needs full time care, it can cost as much as a mortgage or rent. Having a grasp of your own day-to-day expenses prior to having a child will help you understand the impact of paying for care out of your regular cash flow.
• If it is possible to save in advance, many day care centers offer discounts if new parents can deposit a 6- or 12-month lump sum at once.
• If one spouse will be the primary caregiver, it is important to review how the loss of income may affect cash flow and savings.

Savings Strategies:

• Having a larger emergency fund should be your priority, as you never know what costs could come up.
• Some families need to move into a larger space after having a child. If you expect this to be your situation, you may need to redirect discretionary spending or lower retirement savings for some time to build up a larger down payment.
• Saving for college is another big priority of many parents. Even monthly savings as small as $50-100 can compound over time in a 529!

Next month, we will focus on how to protect your family from a risk standpoint. This will include estate planning needs and insurance considerations that new parents should keep in mind.

Article by: Carrie Mangan, MSF, Private Vista Advisor

Private Vista is a group comprised of investment professionals registered with Hightower Advisors, LLC, an SEC registered investment adviser. Some investment professionals may also be registered with Hightower Securities, LLC, member FINRA and SIPC. Advisory services are offered through Hightower Advisors, LLC. Securities are offered through Hightower Securities, LLC. All information referenced herein is from sources believed to be reliable. Private Vista and Hightower Advisors, LLC have not independently verified the accuracy or completeness of the information contained in this document. Private Vista and Hightower Advisors, LLC or any of its affiliates make no representations or warranties, express or implied, as to the accuracy or completeness of the information or for statements or errors or omissions, or results obtained from the use of this information.

Private Vista and Hightower Advisors, LLC or any of its affiliates assume no liability for any action made or taken in reliance on or relating in any way to the information. This document and the materials contained herein were created for informational purposes only; the opinions expressed are solely those of the author(s), and do not represent those of Hightower Advisors, LLC or any of its affiliates.

_{1 https://winnie.com/resources/childcare-101-for-chicago-families#:~:text=In%20Chicago%2C%20the%20average%20cost,around%20%241%2C500%2D2%2C000%20per%20month.}

_{2 https://www.healthsystemtracker.org/brief/health-costs-associated-with-pregnancy-childbirth-and-postpartum-care/}