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The Best Advice On How Being a Parent Affects Your Finances

Anni Irish  |  April 28, 2022

When you become a parent, you’re responsible for some pretty special little ones. Here’s how that experience can impact your finances.

Becoming a parent means undergoing some major life changes, taking on new responsibilities,  and experiencing some personal lifestyle shifts. You’ll have new expenses that are part of your budget, and you’re now in charge of another human’s financial wellbeing, too. Plus, and perhaps most importantly, how you spend money and your attitudes about it will also inform how your child approaches it down the line.

If all of this sounds overwhelming, please don’t worry! There are so many things you can do to be financially strong for your family while also planning for the future. We spoke to several financial experts and parents who have been there, done that, to find out what they’ve learned along the way. 

Think Long-Term 

Ashley Feinstein Gerstley, mother, CEO of the Fiscal Femme and author of Financial Adulting, says: “Kids can give us a new perspective and really ground us in what’s most important to us. This can really help align our finances with our values, where possible.” 

Here’s a look at her best advice for new parents: 

First, keep in mind that your costs will vary greatly by location — something like childcare, for example, can be many thousands of dollars per month in New York City, or just a couple of hundred in Mississippi. Take a look at how you can best incorporate these new costs into your budget.

Next, revisit all of your “in case of emergency” plans. Think about it: an emergency or lost job has new significance now that you’re a parent. The amount you want to have saved is probably going to be more now that you’re responsible for a new person. And on that front, consider looking into term life insurance in case something happens to you. All too often, we think of estate planning as something only for the wealthy, but every single parent needs to know their child will be taken care of should the worst happen. . 

Lastly, plan for larger irregular expenses. With children come new large and irregular expenses like birthdays, holidays, tuition, camp, extra curricular activities and added travel costs. Open up a savings account (or several) and start socking money away each month so you’re not suddenly caught off guard by these expenses. For example, if you contribute to a fund for summer camp year round, the money will be there and waiting for you by the time you need to pay.

Teach your kids the value of money

Kerry Gaertner, mom and Principal of Ver Sacrum Fine Art Consulting, wants her kids to be aware of what it means to earn money on a broader scale. She says:  I think it’s important for kids to learn the value of money in terms of how hard we work for it. But also how unfair it is. You are born into a certain class. It’s simply luck. Hard work doesn’t always equate to being richer — that’s a myth. It’s been important for my kid to see financial diversity in school, and see his parents work for our money and be grateful for what it affords us. He can focus on what we do have, rather than what we don’t.” 

Rebecca Fine, an art lawyer and Managing Director, Art Investments at Yieldstreet and Athena Art Finance has also tried to instill similar sentiments for her kids when it comes to money. “It is important for me to model financial responsibility for my kids,” she says. “They know my values from the way I spend, save, donate and invest my money. They know that education is paramount to me, and I think that has made them very conscientious and hard-working students. Two of my kids are graduating from college this year and one is finishing elementary school,” she said. 

Fine instilled these lessons by encouraging her kids to get a job from a young age. “There is nothing like earning money to make them appreciate how much work it takes to afford the things and experiences they want. It also gives them a sense of agency and self-worth.I tell all my kids that financial independence is key and that they should never plan to depend on anyone else to take care of them,” she says. 

Be resourceful 

Creating opportunities where they might not normally be is one thing that Athena Valentine Lent has seen in her life — especially from her best friend. “My best friend is a single mom and was so resourceful. Her kids had everything they could ever have wanted and she rocked her budget like a bad mother bear!” she says. 

Lent, a Brand Ambassador for Money Smart Latina and a financial contributor to Slate says that “being a parent changes your financial life because providing for someone takes a lot of resources, and that comes first.” 

Being resourceful also means knowing how to get the most out of your money. “ You’ll learn to make a dollar go much further, and also appreciate any service or action that I may pay extra for that can help me earn more time or make life easier,” Gaertner says. (Like spending on takeout when you’re swamped, paying for wash and fold at the laundromat, etc.) It’s okay to splurge for the things that once and a while when it


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