So, you’re expecting a child. That’s exciting! But it can be overwhelming too. Neha Gandhi shares the 8 financial lessons her family learned along the way.

Nothing compares to the excitement my husband and I had when we found out we were expecting a baby. As first time parents, we found it easy to get carried away in the shopping sprees for adorable little clothes, baby essentials, and cute nursery furniture. But at the back of our minds we worried about the financial changes that this new phase of life would bring.

My husband Amit and I did some groundwork— we consulted online articles, financial experts, our friends and family. Through this wide range of research, we learned a lot, and it helped us navigate this overwhelming new stage. Here are the 8 biggest financial lessons we learned:

1) Budgeting: While keeping track of the income and expenditure on a regular basis is sound financial advice, we discovered it is all the more important when you are expecting a baby. So we made a realistic budget. We added in our fixed expenses (such as mortgage, utilities, etc.) and our variable expenses (such as eating out, entertaining, etc.). Then we accounted for our new lifestyle: shopping for the baby, taking trips, and childcare.

2) Life Insurance: We were advised that if we didn’t already have it, this was a good time to shop for life insurance. As scary as it sounds, we felt it was prudent to have policies in place for the security of our growing family. We learned that many employers offer some coverage, but that we could also supplement with another policy if needed.

3) 401K: With all of the distractions that a newborn can bring, don’t forget about your retirement goals! While saving for retirement is always important, it can be tempting to reduce your contributions in order fit your baby expenses into your budget. Especially if your employer offers matching contributions, take advantage of it. While this seemed to us like one of the most obvious bucket to funnel a portion of our income, we were surprised to learn that a lot of people don’t take advantage of this benefit. Pre-tax contributions + some “free money” from the employer is a no-brainer way to increase your saving, which is important when your family is growing.

4) Emergency Fund: It is important to have a rainy day fund that can come in handy in case of emergencies. We learned that some recommend having as much as six to eight months of savings in the bank. This can be subjective, so every family should evaluate their own income and expenditures and come up with a good buffer when planning their emergency fund. No matter how much, we realized an emergency fund is important for us to have.

5) Managed Assets: We had heard the clichéd joke “don’t hide your money under the mattress…it doesn’t grow by itself!” We knew that thinking about investing would make sense if we needed our money to grow over a period of time (important because our baby’s needs will only grow over time!). But since we didn’t know where to start, we did some research and discovered that for a small fee, there are brokerage firms that can help manage and diversify our portfolio. It is never too late to invest and it may be a good time to start while growing a family.

6) Dependent Care FSA: As soon-to-be-parents, we were excited about this benefit (pre-taxed dollars) that’s offered by some employers. But for some reason, many people don’t seem to be taking advantage of it. Most of us will need to spend on childcare, such as daycare or a nanny, and this account can help us set aside pre-tax money just for those expenses. There’s a use-it-or-lose-it catch to this one, so be cognizant of the expenses and how much you decide to put in.

7) College Savings Fund: By talking to colleagues and friends, we learned that many of them were taking advantage of the 529-college savings plan. There are lots of college savings options, and it may be best to work with a financial planner before deciding, but many new parents find it’s a helpful way to save.

8) Estate Planning: Planning for our assets was one piece of advice that we received unanimously from everyone we talked to. Ensuring that our child is cared for at all times no matter what the circumstances is one of the best things we can do for our child.

We learned a lot about our finances when we started planning for our baby and realized that it was definitely good to plan and understand all the available options, but at the same time–we gave ourselves some slack. We understand that there isn’t one single plan that will work for everyone, and we will figure things out as we go. Most importantly, we want to cherish every moment of this new adventure.

Neha Gandhi is editor of Love Playing Dressup, a lifestyle blog that encompasses fashion, lifestyle, beauty, travel and home decor. Connect with her on Facebook, Twitter, Pinterest and Instagram.

Any third-party resources or websites referenced above are not under Society of Grownups control. Society of Grownups cannot guarantee and are not responsible for the accuracy of the resources, websites, or any products or services available through such resources or websites.

While Society of Grownups hopes the information is useful, it’s only intended to provide general education. It’s not legal, tax, or investment advice, and may not apply or be useful to your specific financial situation. If you need recommendations geared to your personal financial situation, schedule time with a financial planner.

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