Stork funding: financial planning for a new child.

• Author: Setter, Amber
• Position: Financial planning

In March 2015 my husband and I welcomed our first child. I had a lot of fiscal responsibilities the months leading up to the arrival of our daughter. I was a business owner, the CFO of our family and the trustee of a deceased family member's estate. I knew that I would have to create the space to focus on my newborn if I wanted to transition into parenthood with ease and grace. And, because of my numerous commitments, this would require me to do a lot of financial planning.

In this article, I share what worked for our family in hopes that it will create ease in the lives of other new parents, whether that be you or your clients with plans to grow their families.

Start Saving Years in Advance

The best advance planning you can do to prepare for the arrival of a child is to save, save, save. According to the USDA, the average cost of raising a child born in 2014 is more than S250,000. Children are one of life's greatest gifts--as well as one of our greatest financial commitments.

Years before our daughter was born I created a separate savings account, named "Baby Savings." I set up an automatic transfer so money was funneled in to the account monthly. We never missed the cash in the short term and over a span of several years the account grew to several thousand dollars.

Once we were pregnant, we had a nice cushion to offset medical co-pays and the costs--which add up quickly--to get our home ready for baby. While I had a healthy pregnancy, I went to the doctor's office twice per week near the end. We also had to transform a home office into a second bedroom with room for baby and space for family members who planned to come and help. Since my husband and I both work from home, we were able to use some of the funds to offset the costs of renting an office outside of our home.

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We couldn't have predicted all the expenses we incurred to prepare for our new family member. Overall, this cushion proved to be very helpful. Saving for years in advance meant we didn't give birth to any debt in the process. Like many American families, I was faced with months of unpaid maternity leave, yet I didn't feel an overwhelming amount of financial pressure. This allowed us to take more time off of work and be with our newborn child.

The Year Before

One of the first lessons of parenthood is that your schedule is no longer your own. While many medical advances have been made, we still cannot precisely pinpoint when a child will be born. Some...