4 Money Questions You’ll Face When Starting a Family

As a first-time parent, you have an endless stream of questions floating around your head. From inconsolable crying to reaching major developmental milestones, there’s no shortage of things to worry about when welcoming your first child, and it’s all perfectly normal. Some questions, however, are more important than others—particularly when it comes to your family’s financial future.

What’s ahead?

Finances are one of the first things couples should think about when starting their family. Because as much as you love your little one already, it takes more than love to raise a child — it takes money and lots of it. While you don’t have to come up with the full $233,610 it takes to raise a child on Day One, there are other questions you need to answer ASAP.

Should we buy a house?

Are you looking around and realizing there’s not nearly enough space for a crib, let alone a rambunctious toddler? A lot of couples decide to buy a home when they have a baby on the way, but is it right for you?


Buying a home requires a lot of money, particularly when it comes to the down payment. As Redfin explains, a down payment is a lump sum homebuyers must pay upfront, and depending on the loan type, it can be as much as 20% of the purchase price. A PennyMac FHA loan, for example, makes it possible for first-time buyers to put as little as 3.5% down, though these loans require buyers to pay mortgage insurance for the life of the loan. A smaller down payment also means higher monthly mortgage payments. Just be sure to practice due diligence when shopping around for a home loan.


Before going this route, make sure the full cost of homeownership is a good deal compared to rent. If buying a home costs more than upgrading to a larger rental, you may be better off renting for a few more years and using the money you save to fund a larger down payment.

Should I become a stay-at-home parent?

Childcare is expensive. Like really expensive. Nationwide, center-based care averages more than $200 a week, and seven in 10 families pay more than 10% of their income on childcare. With prices that high, you might be thinking it makes more sense to be a stay-at-home parent, but comparing take-home pay to childcare costs doesn’t provide the full picture.


When deciding whether to stay home, U.S. News says you must account for everything you’ll lose by leaving the workforce, including your full compensation package and potential career advancement. If it’s more than you can afford, consider working part-time to keep one foot in the door.

What kind of insurance do we need?

Making decisions about insurance isn’t something parents-to-be can afford to delay. Your health insurance policy has a big impact on what you pay for prenatal care and childbirth. Newborns must also be enrolled in health insurance within 30 days of birth to avoid coverage gaps.


Health insurance isn’t the only policy new parents need. Life insurance is something every new parent should have, whether you’re earning an income or staying home. Life insurance covers lost income or childcare expenses, pays off debt, and can even fund your child’s college savings account if the worst happens.


Baby showers help new parents cover the obvious costs of having a baby, but when it comes to these big questions, new moms and dads are largely on their own. While you’re unlikely to find an insurance policy in your pile of gifts, you don’t have to tackle it all alone. Ask your parents for advice, talk to friends about their experiences, or even enroll in a financial literacy class. When it comes to preparing for your first child, there’s no such thing as doing too much.

Written by Laura Pearson