Your child’s financial life: What most parents miss and how to get ahead

When our child was born last December, I thought I understood what it meant to plan ahead. But nothing compares to the mix of love, fear, and clarity that comes when you hold your baby for the first time. Our child is 8 months old now, and I’ve been thinking a lot about how money fits into parenting. Not just in the short term, but over their lifetime.

Before they were even born, we started saving $500 a month into a high-yield savings account. We didn’t know what it would be for, but we wanted to be ready. That simple act of saving without a specific purpose gave us the flexibility to adapt. Now that we’re deep in it, I see how much of a gift that has been.

We also learned quickly how valuable it is to have safe, trusting childcare. Paying for daycare is worth every dollar. And we’re lucky to have my mom help too. Years before we became parents, we bought our home close to her, knowing how important family support would be when the time came.

Parenting food for thought

• Not every path to parenthood is the same. Some people choose to adopt or foster. Others go through medical procedures like IVF. These are meaningful, personal decisions and they come with financial implications that deserve thoughtful planning too.

• Put your own mask on first. It’s important to prioritize your financial stability before overcommitting to your child’s future. A secure foundation makes you better able to show up for them long term.

• Your child’s financial life starts now. Every decision you make around money, what you spend, save, insure, or invest, affects their future. Time is on their side, which gives you options you may not have had yourself.

Here are the planning areas I walk through with clients, whether they’re expecting, raising toddlers, or helping young adults:

Before having a child

• Estimate early costs like birth, leave from work, daycare, and diapers
• If facing fertility challenges, plan ahead for potential costs of treatment or adoption
• Set up a flexible savings account for unknowns
• Review or increase life and disability insurance
• Create or update your estate plan

Early care (0–5 years)

• Decide what kind of childcare makes sense for your family and values
• Consider the tradeoffs of staying at home vs earning income. Both are real work
• Open a high-yield savings account or 529 plan
• Automate contributions, even small amounts
• Start tracking family expenses and adjusting lifestyle

School-age and teens

• Review and adjust 529 contributions if college is part of your plan
• Plan ahead for summer camps, enrichment programs, and travel
• Consider UTMA or custodial brokerage accounts for flexibility
• Teach your child about money using allowances or small jobs
• Evaluate housing and school districts based on long-term tradeoffs

College planning

• Coordinate 529 distributions with financial aid
• Track qualified vs non-qualified expenses
• Discuss financial expectations with your child early
• If paying out of pocket, build a cash flow strategy year by year

Adulthood and generational wealth

• Plan for gifts like down payments, weddings, or transitions
• Help your child open and fund a Roth IRA if they have income
• Consider longer-term transfers via trusts or gifting strategies
• Keep the focus on supporting independence, not control

I’ve had clients go in very different directions. One couple funded their child’s 529 and taxable brokerage so they could support college and a future home purchase. Another chose a more expensive home in a great school district and made peace with the tradeoff. Another naturally reduced spending after having their first child and didn’t need to overthink it.

No one right answer. But clarity helps.

If you’re thinking about building wealth for your child’s future, read my guide on using the 529 Plan to Roth IRA transfer strategy. It’s a compelling option that blends education savings with retirement planning flexibility.

Last thought

All the strategies and tactics are secondary. What matters most is spending time with your kids and caring for them with intention. Once you know your family values and goals, the right tools will follow.

If you want help mapping it out, let’s talk.