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Financial planning for having children: why should you add asset protection to it

January 5, 2022
Couple expecting a baby and financially planning for that

OK, financial planning is complex enough. There are various aspects you need to consider, multiple moving parts to account for, a lot of scenarios to think about. Every one of us needs to do it at some point, and the sooner we realize it’s an ongoing effort (as opposed to a one-off action), the better.

As if that’s not enough, having a baby (or a few) adds a whole new universe of expenses and responsibilities into the mix. You’re now planning not only for yourself and your spouse but also for a vulnerable little human being who needs the full package – medical care, education, clothing, food, attention, love… to name a few. And yes, that’s another ongoing activity, not just a one-off ‘OK, done!’ thing.

Let’s explore the financial effects of having a baby, the expenses related to your child and how asset protection helps you manage all of that.


What does having a baby mean from a financial standpoint?

First things first – you need to know exactly what it means financially to have a child. It’s of paramount importance to understand whether you can afford to take proper care of your baby. There’s a lot to consider here, so let’s get started with the most important items you’ll need to budget for:

  • Increased medical care and/or insurance premiums
    Having a child almost certainly means an increase in your family’s health care plan, including an increase in your insurance premiums. That varies a lot in terms of country and provider, yet it’s a tremendously important item to check off your list.
  • Clothing, diapers, food, toys
    People often neglect the small details. Those items don’t cost much independently, but they are a continuous expense, and one that soon mounts up. You’ll go through 5-8 (or more) diapers a day; your child will rarely have an item of clothing that they’ll be able to wear for more than a few weeks; toys are age-appropriate, meaning you’ll have to get new ones every few months.
  • Educational supplies and higher education
    Don’t forget educational supplies. Your child will need a lot of books and stationery, as well as materials for all those interesting craft and science projects.
    Higher education is a whole different ball game. Although it’s a bit further down the road, it’s still something to start thinking about as soon as you can. A full scholarship is definitely what your child should be going for, but in case that doesn’t happen, a solid financial foundation ensures a proper education.
  • Housing
    Having children also means finding extra space in your house or apartment, as trivial as it may sound. Newborns sleep in the same room as their parents for obvious reasons, but that period quickly passes and your child will need their own room, which might require thinking of purchasing a bigger home. One other thing to keep in mind is space for your child’s things. A bed doesn’t take up much space on its own, but all the accessories – toys, stroller, car seat, baby bath, playmat, etc. – do.
  • One parent stepping away from their job for a while
    Something people easily forget is the reduced financial income of the family if one of the parents steps away from their job. If you can manage to take care of your child and continue working (i.e., you’re a freelancer or have your own business), great. Most people, however, cannot, and one of the parents has to take leave.
  • Caregiver
    Another complex topic is hiring someone to help you with your baby. Having the baby’s grandparents nearby is great as they can step in and help from time to time, but truth be told, you’d most likely want a babysitter as well, and that’s a huge additional cost.


What can you do to mitigate the effects of those increased expenses? Asset protection

The list above is extensive but incomplete; there are a lot of additional items that might pop up. Let’s get you started with some of the ways to mitigate the effects of your increased expenses related to having a child:

  1. Professional help
    Buying a new home (or enlarging your existing house, if possible) and choosing the right health care and insurance plans are not trivial tasks. The most important thing after your child is born is taking care of them, and the more an experienced professional can take off your shoulders, the better for you and your child. There are consultants to help you with each of those tasks.
  2. Financial aid
    Most countries have various financial aid programs for new parents. These include one-time or monthly checks for taking care of your child, and financial aid with mortgages, health care plans, leases, etc. It’s definitely worth looking up what your local government could do for you as you’ll easily find a use for every penny you receive.
  3. Tax reduction
    Along with financial aid, parents often receive a tax reduction to assist them in raising their children. Whether it’s getting some of your tax money back, having your interest rates reduced, or paying lower taxes for the years to come, it’s  extremely beneficial. Make sure to do your research and use the options you’re given.
  4. Special savings accounts
    Having a savings account for your child is a no-brainer, but a lot of financial institutions offer investment savings accounts with a very low risk. They’re not designed to make you rich but rather to protect the money you save for your child in a more intelligent way.


Asset protection

Asset protection, to which we’ve dedicated a whole section on our website, has its place when it comes to preparing financially for having children. Regardless of all the other methods suggested above, if you don’t protect your assets, your efforts might be in vain.

Having children requires a complex approach to making sure you’re well prepared to meet your family’s evolved needs. You’ll most likely end up:

  • Opening new bank accounts and investment accounts;
  • Buying new insurance policies;
  • Setting up trusts;
  • Buying property;


It makes sense to protect those assets as best as you can, especially knowing you’ll need to be doing that for a prolonged period of time. It’s easy to get lost in the mechanics of preparing financially for having children and forget about the need to secure the resulting assets.

Asset protection has evolved quite a bit over the years, too. The most common technique used by people in the past was to list all their possessions and either store the list on their computers (or removable drives) or print it on a piece of paper and physically store it in a secure place. Apart from people doing the same things on cloud services, this field hadn’t evolved much until recently. Nowadays, there are digital asset protection services that are dedicated to helping you achieve that goal; they most often include:

  • better protection (encryption, multi-factor authentication, secure servers);
  • creating a dynamic catalogue of your assets and assigning beneficiaries and trustees to them;
  • the ability to inform beneficiaries and trustees in the case of an unforeseen event;
  • support for beneficiaries and trustees should they need to access and use the information assigned to them.

We at DGLegacy are on a mission to empower our members to protect their assets and give them and their loved ones the ultimate peace of mind. Driven by our own experiences and life events, this mission is personal for us. We know this can be a very difficult undertaking – allow us to help you on the road!

Victor Minev
Product guy, email nerd. Loves to talk about all product-related things. Domains - email, cybersecurity, compliance, fintech, sportsbetting, retail.