BOSTON (CBS) – Where there were two there now could be three, four, or more if you used fertility drugs.

Babies change your goals. Instead of a sports car you are thinking a van. Instead of retirement planning you begin to think college planning.

The most common goals:

  • Staying at home with the new baby
  • Larger emergency fund
  • College education for the newest member of the family
  • Bigger house
  • Comfortable retirement

Stay At Home Parent: You need to decide if you can live on one income and for how long. If you are pregnant or planning to have children try living on one income and save the other income. See if it’s doable.

A Bigger House: This goal may need to be put on the back burner if you can’t afford a bigger mortgage right now.

College Education For The Baby: If you start when you are still changing diapers you can be more aggressive with your investments. Fidelity manages the Massachusetts’ 529 college plan and has portfolios that are age-based where they choose the investments or they allow you to choose a more aggressive portfolio which you manage.

Comfortable Retirement: Please don’t put retirement planning on the back burner. There are so many new demands on your resources with a baby, but it is a mistake to stop contributing to your retirement plan.

So often new parents think in terms when the kids are older they will have more money to sock away for retirement. From my experience the bigger the kid the more expensive he becomes.

So continue to contribute to your retirement plan at work and if one parent does stay home with the baby consider using a Spousal IRA. The at-home parent can use the joint family income as the basis for their IRA and contribute up to $5,500 this year.

Be sure you both have adequate life insurance. Term life insurance is cheap for a young couple.


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