Having a Baby in 2022? 5 Money Moves to Make Now

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  • There are logistical and financial implications of having a baby.
  • It's important to run some numbers, figure out your work and childcare plans, and make sure your family is protected financially.

Here's how to gear up for that new addition to your family.

Having a baby is exciting. But let's face -- it can also be stressful, whether it's your first or not. In addition to coming to terms with weeks of sleepless nights, you'll also have some financial matters to grapple with. Here are five key money moves to make if you expect a baby to make an appearance this year.

1. Know what paid leave you're entitled to (if any)

If you're a salaried employee, you may be entitled to some amount of paid parental leave -- or not. Companies are required to hold your job for a certain period of time after your baby is born, but they're not required to pay you for it. Now's the time to figure out what compensation you'll be in line for should you decide to stay out of work for a couple of months.

2. Figure out if you'll be returning to work or not

You may decide you won't be going back to work once your baby arrives -- whether because you want time to bond with your little one or because you've crunched the numbers and the cost of daycare will leave you with such little money it's just not worth holding down a job. If that's the case, you'll need to redo your household budget to account for your loss of income. If you will be going back to work, you'll need to account for childcare expenses.

3. Secure your childcare in advance

In some parts of the country, childcare for infants was difficult to come by before the pandemic. But the events of the past two years have only made things worse. There's a major shortage of childcare on a national level, and the last thing you want is to have a baby and gear up to go back to work, only to be forced into a career break due to a lack of care. Even if you're only midway through your pregnancy, you may want to put down a deposit at a local daycare center to reserve your spot -- and then put down a second deposit at a backup center in case your main one folds.

4. Apply for life insurance if you don't have it already

Once you have a baby, you'll have someone in your life who depends on you financially. If you don't have life insurance yet, now's a good time to purchase a policy. In fact, it pays to do so even if you have no plans to work. Say it's you, a spouse, and a baby, and you pass away unexpectedly. At that point, your spouse might need to pay for childcare to keep working, so having a life insurance benefit could help ease that burden.

5. Shore up your emergency fund

Having a baby could lead to a host of surprise expenses -- costly medical bills from your hospital stay, having to take extended parental leave unpaid, or dealing with higher-than-expected costs in the course of caring for your little one. That's why it's a great idea to boost your emergency fund before that baby arrives. You should aim to have a minimum of three months' worth of essential living expenses in your savings account, but those expenses should, ideally, account for the new ones you'll face once your baby is here.

The more you prepare financially for the arrival of a baby, the more you'll be able to focus your efforts on giving your newborn the attention they need. Aim to check these items off your list in anticipation of your bundle of joy. With any luck, doing so will give you the peace of mind you deserve as you gear up for a major life change.

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