Planning for a Baby

It will come as no great surprise to most of you when I tell you that having a baby is expensive. With all the activity that surrounds a pregnancy and an upcoming addition to the family, the last thing most people think about is putting together a financial plan for this big change in your lives but that’s exactly what you should do.


I’ve compiled a list of things that you should consider when planning your first (or subsequent) child:

  • Create a budget – Think about all of the items that you plan to buy for the baby and put them all down on paper. You need to list the big items like a crib, stroller, car seat, etc as well as all of the little things like clothes and blankets. See if you can get a friend or relative that recently had a baby to help you with this list so you don’t miss anything. Once that’s done, figure out how much you can afford to spend and put a dollar value beside each item. If you end up spending more on one item, then you’ll need to find a lower cost one somewhere else to make sure you come in on budget.
  • Start early – Many of the items you plan to buy on your list from above can be found gently used or at least on a good sale. If you make your list long before the baby is due, you have time to watch for sales and scour the online classifieds. Don’t be in a rush to buy the first thing you see and wait for the right deal to come along.
  • Buy Used – Many parents fall into a line of thinking that since the baby is new, all of these items need to be new as well. You need to remember that the baby doesn’t care if someone sat in the stroller before they did and they’re going to outgrow most of these items long before they wear out. Send out some emails or messages to friends and family that have young children and see what they’re willing to part with. Most probably have a room full of baby clothes, toys and furniture that they’ll never use again.
  • Save some of your list – You will most likely have a shower and people will want to know what to buy you. Try to make sure you save some of the items you need to create a registry or wish list.
  • Prepare for one income – In most two parent households, one of the parents will often stay at home following the baby’s arrival while the other partner returns to work. If the person staying home has been contributing income to the household in the past, you need to adjust your budget to prepare for this loss of income. Find out what maternity benefits are available to you and then decide what changes to your lifestyle may need to take place to accommodate this shortfall.
  • Review your insurance and investment plan – The time to do this review with your advisor is when you find out your pregnant, not after the baby is born. If your post birth plans include having one income earner in the family, consider what happens if that person is disabled or killed. It’s very important that you review these possibilities early in the planning process to make sure you’re protected. I always try to remind clients that if dad is the sole income earner and something happens to him when mom is 6 months pregnant, the baby is still coming.
  • Don’t travel outside of Canada – For those of you that missed my article a few months ago on the issues with travel medical insurance for pregnant women, I’ll try to summarize – You’re not covered properly to go outside of Canada even if you think you are! Send me an email and I’ll forward you a copy of the article.

The above list is by no means comprehensive but it gives you a good start in your planning process. Parents want to give their babies the best of everything but consider that if doing so, it could put you in a bad financial position for years to come. If you know of anyone who is expecting right now, cut this article out and pass it along!

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Mutual funds products are offered through Investia Financial Services Inc.