So you Just Had a Baby?!

By Jeffery A. Keill, CFP, CIM, FMA, FCSI, Portfolio Manager and Senior Wealth Advisor Keill & Associates- Advisory Team

So you just had a baby?! First of all, congratulations from all of us at Keill & Associates. Parent hood we believe is the highest calling of any human being and for many people the greatest love they will ever experience. We understand firsthand what it is like to welcome a newborn into your growing family. It is joyous, beautiful, full of wonder but also hectic, confusing, and messy. We also know that there are no hard and fast parenting instruction books or game plans to every single situation. Your baby and your family are different in many ways but there are some common things that we believe every new parent should think about. The following are some basic concepts we think every parent should consider assuring the well-being of your child and the financial security for your family. Here are some concepts and steps you should consider as a young parent before and certainly shortly after the baby is born.

Budget:

We are sure you like so many new-to-be parents had considered/dreaded during the pregnancy period just how you plan to pay for this baby. We recommend you re-look at your budget now that the little darling has arrived. Pre-birth cash flow is quite different to the income and expenses experienced after giving birth. There are new incomes and most likely changes to exiting incomes (especially in the first year). With regards to monthly living expenses, you will see new things pop onto your budget sheet that you never imagined prior to being a parent. Part of this is the realization that there is another human to feed, clothe, and nurture. The onset of added costs associated with having a baby can be really overwhelming and can scare most parents. Have confidence and move forward knowing the other millions of people have dealt with the same fear and have come out the other side. Sit with an experienced parent or Advisor who can help you navigate a new budget that includes new daily living expenses such as a Will, Power of Attorney, Life Insurance, and Education Savings. Having a budget plan will go a long way in helping to reduce the financial anxiety and the thought of being overwhelmed.

Risk Management/Insurance:

Review your health and life insurance coverage, both your private or group insurance, to ensure it includes your new family member. Along with health coverages we highly recommend you consider the need for life insurance. It generally is far less expensive than you might think and will help protect your family and child financially in case something has happened to you. Work with a qualified Wealth Advisor to determine the type, coverage, and premium that is right for you and your family.

Children’s Education Savings:

Start to systematically save for new child’s education. There are tremendous programs available, such as the RESP, that can help build savings through contributions, Grants and tax-free growth. The sooner you start contributing the greater the savings will be. Setting up a RESP for your child is quick and easy. Read more about this topic in our Serious Money Brief Discussion: Education Savings.

Estate Planning:

Many people do not find much enjoyment when thinking about their mortality but it is one of life’s only certainties. As sure as you are born you will die: the trick is trying to avoid this unfortunate outcome as long as possible. Parents become acutely aware of this and in case things do not go according to plan, it is good for new parents to establish or re-look at their estate plans. That is to say: their Will and Power of Attorney. The birth of a newborn creates a real need to establish clarity and direction for the child and family. Not only will the Will of a parent lay out how the assets are to be dispersed after paying debts but it will also elect a guardian for the child and a trustee to help administer the inheritance for the child. We recommend you speak to one of our strategic partners who provides the legal services to draft and create this important estate document. Not only should you consider a Will to deal with things upon death but also a living will or Power of Attorney (POA). There are two types of POA’S: financial and health. The need for the POA occurs when you suddenly become incapacitated and no longer can make decisions for yourself or your children with regards to financial matters or matters of health.

Tax Planning:

The birth of a newborn brings with it the addition of certain potential tax deductions, credits, and benefits but you would be amiss to not take advantage of them regardless. Not only is it every tax payers right to position their family’s situation to pay or attract the best tax outcome it is also their own responsibility to ensure this happens. We recommend reading our brief Discussion paper called; ‘The 4D’s of Tax Planning’ and to speak with one of our seasoned Wealth Advisors.

Your Financial Goals for many people starting a family was a life goal. Yeah-goal achieved! Now what? If the plan to start a family was suddenly burst, unexpectantly.... no problem. Now what? Regardless if the newborn was due to a perfectly timed plan (which rarely if ever happens, by the way) or was because of some other act of God where all bitty-bits worked as advertised you likely find your family floating in uncharted waters. Review your financial goals and adjust them to align with your new expended family situation. To help with the discussion and planning to speak to your partner or a close friend about your plans. Hash out the dreams. Define the goal. Make a strategy. Write it down. Try to think of goals in terms of time and life transitions. Where do you see yourself in 1 year, 5 years, 15 years, and 20 years? Even as new parents where your thoughts are focused on the little eat/sleep/poop machine that you somehow created, it is good to every now and then to drift into dreams and focus your thoughts of your own future.

Our team at Keill & Associates truly understands the stress, uncertainty, and messiness of having a baby. We were new parents once too. By contacting our Team of Wealth Advisors or working with any of our qualified Strategic Partners we can certainly help navigate these important choices. We are after-all, as our slogan says, a Family Focused Wealth Management firm and we are here to help so lets get the conversations started.

Disclaimer and Notice to Reader: This Discussion Paper should not be construed as legal or tax advice but rather only as a general statement and explanation of the topic matter. Professional tax and legal advice should be obtained for the readers own personal situation. For more information on this topic or how it applies to your family, please contact our Wealth Advisory team.

Last Edit Feb 4, 2025