Financial Planning

Financial Advice for New Parents

By  Brian Thorp

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Are you a new parent? Congratulations! Get useful tips to learn how to cope, and discover financial advisors who specialize in serving new parents ready to help you enjoy life with less money stress.

Managing your own finances is hard enough. When it comes to handling the finances for an entire family, you have to manage a bigger budget which often comes with much larger expenses and more complex decisions.

Advice for New Parents

For parents who are expecting or celebrating the birth of their first child, this stage of life can feel particularly overwhelming. Uncertainty about near-term expenses like the costs of food, supplies, and childcare can make budgeting a challenge. And longer-term concerns about lost income when a spouse stays home and saving for the child’s education can create anxiety and uneasy feelings.

A financial advisor who specializes in serving new parents can help put your fears and concerns to rest with advice and guidance personalized to the unique needs of your growing family.

You’ll likely find dozens of financial advisors in your community who are also parents and can help you reach your money goals with a personalized plan. But it may be more difficult to find a financial advisor with specialized experience serving new parents skilled in uncovering specific tactics and strategies useful to couples who just had their first child.

Fortunately, many financial advisors offer virtual services so you can meet online no matter where you (or they) live. This means you can choose to hire a financial advisor who lives hundreds of miles away if you decide their knowledge and unique experience working with new parents could help you sleep better at night, at least during those precious moments when the baby monitor is silent.

In this article, you’ll learn useful tips to make smarter money moves for your growing family, and get to know financial advisors who specialize in serving new parents.

👶 Smart Advice for New Parents

Financial Advisors Who Specialize in Serving New Parents

Three Questions with Michael Acosta

We asked Charlotte-based financial advisor, Michael Acosta, to answer a few questions to help new parents learn smart money moves they can make to enjoy more time with their newborn with less money stress.

Q: What is a common financial planning challenge unique to new parents that you frequently encounter when working with your clients? How do you work with them to overcome this challenge?

Michael: One of the most frequent challenges we encounter is calculating the opportunity cost for childcare.  Childcare has become a very expensive service that many new families are having to navigate, and in some cases, the cost can be as high as a second mortgage each month. 

The opportunity cost at hand is whether or not it makes sense for one spouse to become a homemaker for some time until the child is off to K-12 or for much longer.  In many instances, it’s more cost-effective for a spouse to put a pause in their career, swap their salary for the cost of childcare and spend more time with the child(ren) at home. 

Obviously, taking on the role of homemaker isn’t for everyone, and in other instances, it makes more sense for both spouses to continue working.  The decision is honestly a case-by-case scenario, but we’re there to be objective and provide both the “reasonable” and “rational” outcomes.  

Get to Know Michael:

View Michael’s profile page on Wealthtender or visit his website to learn more.

Q: For couples who are expecting or just welcomed their first child into the world and are feeling a little overwhelmed about the financial implications, what words of wisdom can you share to help set their minds at ease?

Michael: The one piece of advice I share with all newly expecting parents is that children aren’t typically as expensive as we make them out to be. This assumes that the child is born healthy and doesn’t have any major medical needs post-delivery.

If you think about it, though, a newborn typically spends the first couple of months in the parent’s room in a bassinet, so there’s no major rush to get the nursery finalized. Also, the newborn will spend most days in onesies or pajamas (hopefully the zip-up kind 🙂) as opposed to all the cute outfits that they’ll grow out of in weeks.

The point I am trying to make is that we, as parents, want our children to have a certain lifestyle, therefore we make it more expensive than it needs to be often. One way to put these financial concerns at ease is to build your balance sheet in a manner that offers greater access to liquid assets. What I mean is that if you’re in your late 20s or early 30s, there is no need to aggressively overfund your somewhat illiquid 401(k), being that you aren’t retiring next year, the year after, or in 5-years, but you will have expenses and milestones that will require access to funds.

Q: For new parents who are unsure whether or not they should hire a financial advisor at the current point in their lives, what guidance can you provide to help them make a more informed and educated decision?  

​​Michael: I think it is a great idea to consider working with a financial advisor when new parents welcome their first child or their seventh child.  Money can be a difficult topic for many couples, and having an objective third party can offer many benefits. 

New parents who are considering hiring a financial advisor should first consider whether or not the advisor’s service model meets their needs.  We currently live in a day and age where most young parents have student debt and haven’t accumulated hundreds of thousands of dollars for advisory management, and that is perfectly okay. 

You can still benefit from ongoing financial planning advice, being that your life together will evolve on a daily basis.  Having someone who can help you balance and prioritize the present with the future can pay major dividends at the time of retirement.  

Q: How do the services you offer new parents distinguish your firm from other advisory firms? ​

Michael: We offer an ongoing subscription-based financial planning arrangement with our clients.  Through our triage process, we’re able to capture a complete snapshot of our client’s financial balance sheet covering everything from cash flow management to asset accumulation, debt elimination, and of course, risk management.  

Our clients are educated on what they have, how it works, and where they can find it on the day they might need it.  We understand that the static plan deliverable isn’t what clients are seeking; they’re looking for the ongoing process of planning.  It’s the ongoing touches and reviews that will keep our clients on track toward their goals and out of what Carl Richards calls “The Behavior Gap”.  

Q: When you first speak with couples as they become new parents, what questions do you like to ask to better understand their unique circumstances and determine how you can best help them achieve their goals?​ 

Michael: I like to ask the following in order to better understand their unique circumstances: 

  • How is the pregnancy progressing as of today?  Are there any concerns at this point?
  • What are your plans and expectations once your bundle of joy joins the family?  Will both of you continue to work in the same capacity, or will one of you take a reduced working role?
  • Have you already gotten on a childcare waiting list if you plan to go down that route?
  • From a savings perspective, how will the anticipated cost of childcare affect your ability to save consistently?  
  • Do you currently feel as though you have enough liquid assets accessible pre-baby?

Q: What questions do you recommend new parents ask financial advisors they’re considering hiring to help them decide if they’re a good fit? ​

Michael: One of the best questions that should be asked when interviewing a financial advisor is, “Are you a fiduciary?”.  I personally feel as though the advice given should always be in the best interest of the client. 

Also, how are you compensated?  Too often, clients are unaware of how they’re paying for their advisor’s ongoing services or lack thereof.  What type of accessibility do we have with you, and what happens if you change firms (assuming they don’t own their own) or if you were to kick the bucket?  Lastly, what does your onboarding and review process look like and consist of?

At the end of the day, you want to establish a long-lasting relationship with your financial advisor, someone who you trust, like, respect, and who is going to be there on the day you need them most. 

I tell all prospective clients that our first conversation is going to be a lot like a first date, you might feel a little uncomfortable and may not know all the right questions to ask, but by the end of the date, you’ll hopefully know whether or not you’d like to move on to a second or third date.  

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🙋‍♀️ Have Questions about Financial Planning for New Parents?


Frequently Asked Questions & Additional Resources

How do I know if I’m ready to hire a financial advisor?

You should strongly consider hiring a financial advisor if you have a significant amount of money available for saving or investing. This could occur after years of making annual contributions to a retirement plan like a 401(k) through your employer or suddenly if you receive a large inheritance or sell your house for a large profit.

But even if you don’t have a lot of money saved, many financial advisors and planners provide reasonable pricing options and valuable services you should consider, especially if you’re facing a significant life event. For example, if you’re starting a new job, getting married, starting a family, getting divorced, lost your job, starting or selling a business, or approaching retirement age, working with a trusted financial advisor or planner may prove worthwhile.

Before I hire a new financial advisor, should I fire my current advisor?

You don’t need to fire your current advisor before beginning your search for a new financial advisor. In fact, your new advisor can help coordinate the transition of your assets from your previous financial advisor.

Where can I read reviews about financial advisors written by their clients to help me decide if I should hire them?

After 60 years of regulatory prohibition of financial advisor reviews in the US, a rule issued by the Securities and Exchange Commission (SEC) became effective on May 4, 2021 that means both financial advisors and directory websites that help consumers search for a financial advisor can collect and display financial advisor reviews, an important factor worth considering when choosing who you’ll hire to manage your investments and life savings. 

Wealthtender is the first independent advisor review platform designed to be fully compliant with the new SEC rule, and we look forward to helping you evaluate financial advisors based on reviews written by their clients.

I’m a financial advisor interested in being featured in this guide. How do I get started?

Thanks for your interest. We look forward to learning more about your practice and helping you attract your ideal clients where you may be a good fit based on their individual needs and circumstances. Please click here to learn how you can join local financial advisors featured on Wealthtender.



About the Author
Brian Thorp, Founder and CEO of Wealthtender profile picture

Brian Thorp

Founder and CEO, Wealthtender

Brian and his wife live in Texas, enjoying the diversity of Houston and the vibrancy of Austin.

With over 25 years in the financial services industry, Brian is applying his experience and passion at Wealthtender to help more people enjoy life with less money stress.

Connect with Brian on LinkedIn

Disclaimer: To make Wealthtender free for our readers, we earn money from advertisers, including financial professionals and firms that pay to be featured. This creates a natural conflict of interest when we favor their promotion over others. Wealthtender is not a client of these financial services providers. Learn how we operate with integrity to earn your trust.