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Legacy Insights: 10 Financial Tips Every Parent Should Know

August 08, 2025

Legacy Insights: 10 Financial Tips Every Parent Should Know

Becoming a parent changes everything—from your sleep schedule to your long-term financial priorities. As I sit down to write this, I’m reminded that my own daughter’s birthday is right around the corner. She’s growing up fast, and every year brings new joys, new challenges—and new financial realities.

Whether you're expecting your first child or already navigating the wonderful chaos of parenthood, it’s important to reassess your financial plan. In honor of my daughter’s birthday, I’m sharing the top financial tips that I’ve learned—both as a financial advisor and as a dad.

These aren’t just numbers on a spreadsheet. These are real steps I’ve taken that have made a meaningful difference in my family’s life. Let’s dive in.

1. Re-Evaluate Your Budget for a Growing Family

When my daughter was born, I quickly realized that our budget needed a serious overhaul. Diapers, daycare, doctor visits—costs add up fast. Even small things like buying new clothes every few months (because she grows like a weed!) required consistent cash flow planning.

Pro Tip: Use a budgeting app. We can help you with this through our planning software. Use this link to start the process (click here). 

Key Budget Areas to Adjust:

  • Childcare or babysitting

  • Medical expenses (pediatrician visits, prescriptions)

  • Increased grocery and household supplies

  • Education and extracurriculars

Make room in your budget early so you're not caught off guard. And don’t forget to plan for one-time expenses like birthday parties, back-to-school gear, and summer camps.

2. Start (or Revisit) a College Savings Plan – 529 Plans Just Got Better

One of the best financial decisions I made early on was opening a 529 College Savings Plan for my daughter. These tax-advantaged accounts are designed to help families save for future education expenses—and recent changes have made them even more powerful.

What’s New with 529s?

Thanks to SECURE Act 2.0, effective in 2024, you can now roll over unused 529 funds into a Roth IRA for the beneficiary, up to $35,000 over a lifetime, without tax penalties—provided the account has been open for at least 15 years and meets contribution limits.

This flexibility is a game-changer. Before, many parents hesitated to fully fund a 529 out of fear their child might not attend college. Now, those funds can still support their financial future in a different way—via retirement savings.

3. Update or Purchase Life Insurance

This is the tip that hits closest to home. When my daughter was born, I realized that my financial responsibility wasn’t just about paying bills or saving for the future—it was about protecting her if something happened to me.

Whether you're the primary breadwinner or a stay-at-home parent, life insurance is essential.

What to Consider:

  • Term life insurance is often the most affordable option for young families.

  • Aim for coverage that is 20x your annual income.

  • Don’t forget to factor in things like daycare or education costs that would need to be covered.

It’s also a good time to review your beneficiaries on existing policies and consider how your needs might evolve over time. If your policy is more than 5 years old, it's worth reviewing with a financial planner to ensure you're still adequately covered.

4. Set Up (or Revisit) Your Estate Plan

It might feel uncomfortable to think about, but having a will and estate plan is a must when you have kids.

Key documents include:

  • A last will and testament, naming a guardian for your children

  • A financial power of attorney

  • A healthcare proxy or living will

Even a basic estate plan ensures that your child will be cared for according to your wishes if something happens to you or your spouse.

5. Boost Your Emergency Fund

A good emergency fund is the foundation of financial stability—especially when you have children.

Life is unpredictable. Kids get sick. Jobs change. Cars break down. Your emergency fund gives you the breathing room to handle unexpected expenses without derailing your long-term goals.

Rule of Thumb: Aim for 3–6 months of living expenses, stored in a high-yield savings account for easy access and growth.

6. Think Beyond College: Roth IRAs for Your Kids?

One of the most overlooked financial opportunities for kids is opening a Roth IRA—yes, even for minors!

If your child earns income (e.g., babysitting, modeling, mowing lawns), they can contribute up to the lesser of $7,000 or their total earned income in 2024. With decades of compound growth ahead, this could turn into a significant nest egg by the time they reach retirement age.

This idea often works in tandem with the new 529 rollover rules—building both flexibility and long-term financial health.

7. Teach Financial Literacy Early

One of the greatest gifts I want to give my daughter is financial confidence. It starts young. As she gets older, I plan to involve her in simple money decisions like saving for toys, giving to causes she cares about, and understanding how money works.

Great resources to start:

  • “Money As You Grow” by the Consumer Financial Protection Bureau (CFPB)

  • Greenlight or BusyKid apps for allowance and basic banking

  • 529 plan dashboards to show how we’re saving for her future

This early exposure helps foster responsible habits and a mindset of abundance, not fear, around money.

8. Maximize Tax Benefits for Parents

Don’t leave money on the table during tax season. Parents often qualify for powerful tax credits and deductions that can meaningfully improve your annual return.

Tax Breaks to Know:

  • Child Tax Credit: Up to $2,000 per qualifying child under 17 (IRS)

  • Dependent Care Credit: For daycare and child care expenses

  • 529 Plan State Tax Deductions: Many states offer deductions or credits for contributions

A trusted financial planner or tax professional can help you identify what applies to your specific situation.

9. Balance Saving for Your Child vs. Saving for Yourself

This one can be tricky. Naturally, you want to give your child the best future possible—but not at the expense of your own.

Remember: There are loans for college. There are no loans for retirement.

Make sure you’re still contributing to:

  • Your Roth IRA or 401(k)

  • Your HSA (Health Savings Account), if eligible

  • Your own emergency fund and long-term savings

You’ll serve your children best by modeling financial stability—not martyrdom.

10. Don’t Go It Alone – Work with a Professional

Even as a financial advisor, I constantly re-evaluate my own plan—because life changes, markets change, and so do your goals. If you’ve recently had a child or are planning to expand your family, now is the time to check in.

A financial planner can help you:

  • Prioritize savings goals

  • Choose appropriate insurance

  • Build a tax-efficient strategy

  • Plan for multiple kids, inheritances, or special needs

We’re here not just to help you build wealth—but to help you build a life that supports the people who matter most.

Final Thoughts

Having a child is the ultimate financial wake-up call. But it’s also the ultimate opportunity to build a meaningful, secure future—for them and for you. These tips are just a starting point, but taking action now can make all the difference.

As I look forward to celebrating my daughter’s birthday, I can honestly say that becoming a parent changed everything for the better. And I hope these insights help guide you on your own journey.

 Disclaimer:

This content is for educational purposes only and does not constitute financial, legal, or investment advice. Please consult with a qualified financial professional before making any decisions.

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