Are you adding a child to your family? Congratulations! Whether it be through birth or adoption, parenthood is a fulfilling experience that requires careful planning and consideration.

As with any major life change, if you have a better grasp of the financial requirements and necessary tasks, you can be better prepared for what's ahead. Start by asking yourself (and your partner, if applicable) how you’ll handle the following questions.

Important Questions to Ask

Will you (or your partner) take parental leave?

Though the United States does not offer universal paid parental leave, many employers offer some kind of maternity leave, and may include some portion of it as paid time off. In fact, the Family and Medical Leave Act allows eligible employees to take up to 12 weeks of unpaid leave after the birth of a baby. Talk with your boss and your HR department to see what you can arrange. Don’t forget to explore options for paternity leave, if applicable. If no paternity leave is officially available, talk with your partner. You may still be able to save vacation time or other paid time off.

Will you plan on a hospital, birthing center, or professionally-assisted home birth?

Be sure to include the financial aspect in your research. Does your health insurance cover a specific method and not others? Are your doctors and other prenatal professionals covered under your insurance plan? These kinds of questions are very important. Meet with the birthing professionals or institution beforehand to clarify billing procedures and to make as many arrangements as possible before the baby gets here.

Are you prepared for the costs of adoption?

While adopting a child means you don’t have to worry about the healthcare costs associated with childbirth, the adoption process itself can be quite expensive, especially if you adopt through an agency as opposed to foster care. Be sure to get in touch with an adoption attorney or another expert to better understand what adoption expenses will look like for you.

Where will you get all of the supplies you'll need for your new family member?

Will you buy most things new, or can you buy second-hand or borrow? While it is very important to buy some things new for safety reasons (car seats and strollers, for example), many other expenses can be reduced through buying things secondhand – or even borrowing them! Baby clothes, toys, diaper bags, and other necessities can strain your finances if you’re not careful. Take a good look at your budget and see what you can reasonably afford.

Are there existing medical or other conditions for the mother or child which will require special treatment?

While most people can’t know this answer for sure, it is something to consider. For example, if you plan to adopt a child with special care requirements, or if the mother has special medical circumstances, take a look at those extra costs and budget them in as best you can.

How can you start saving for your child’s future?

Every parent wants their child to have a bright future. And one of the best ways to accomplish that is by setting up a college or post-secondary education fund. That’s due to the power of compound interest: letting the money you’ve invested work for your child’s future. There are a number of different ways to set up an account for your child, including tax-advantaged 529 Savings Plans*, or enlist the help of your local bank!

At Hills Bank, we make it easy to save for your kid’s future with a CollegeSaver CD or a Coverdale Education Savings Account. These special certificates of deposit will grow your child’s college fund over time in a risk-free account, which you can add to over time to grow their funds further.

And don’t forget about their own spending money, especially if you’re adopting or fostering a child old enough to do so. We offer a wide variety of kids’ accounts to suit their needs as they grow older.

Act on Your Answers

The answers to these questions can inform you as you create a new budget. Take a look at your current expenses to see where you need to make adjustments. You'll probably end up needing more than you expect for your new bundle of joy, particularly if this is your first child. Being generous with your budget now and planning around these new expenses in advance can make the transition easier when the baby arrives.

If possible, start setting aside the amount you plan to spend on your child each month in a separate account. If one partner plans to stay at home after the baby is born, ease your way into living on one income and set the rest aside in the baby account, too. This way, you can make the financial shift before your child arrives, and you have some extra money put away for unexpected (or expected) expenses. If things are too tight, talk with your partner and decide where you can adjust your new budget.

* Investment products are not a deposit, not FDIC insured, not insured by any federal government agency, carry no bank guarantee, and may go down in value.