The Pre-Baby Financial Check-Up

The Pre-Baby Financial Check-Up Questions to ask yourself and your partner

Planning to start a family? It's important to have a frank discussion with your partner about financial priorities before baby makes three. Here are some of the key issues you'll want to resolve.

How important is it to you that

-one parent leave the workforce to stay at home with the children until they reach certain age?

-you have the funds on hand to pay for your child's education when the time comes?

-you vacation as a family for a few days each year?

-you that you have funds on hand to spend on recreational activities like hockey, skiing, snowboarding, boating, and so on?

-you retire early or enjoy a higher-than-average standard of living during your retirement years?

-you get rid of any consumer debt (credit cards, car loans, lines of credit, and so on) that you're carrying right now?

-you pay off your mortgage sooner rather than later?

-you give something back to your community through charitable donations?

Expectant parents don't always agree on money—how's that for an understatement?—so it's important to find out where your partner's financial priorities lie, too.

If you find that you have conflicting priorities, you'll need to figure out a way that the two of you can reach a compromise. If you're lucky, there won't be too much to negotiate. You'll discover that you and your partner are basically on the same wavelength when it comes to your financial goals.

This was the case for Anne, a 40-year-old mother of three, and her partner, Andreas: "We have a loose financial plan that includes saving money for retirement, saving for our children's education, living comfortably and enjoyably now, and being able to afford what gives us pleasure. We agreed on these priorities from day one."

Kristin and Jeff, 30-year-old parents with one child, are also in agreement about their family's financial goals. "Our financial goals are to pay off our mortgage by age 40; to give our children the opportunity to participate in extracurricular activities, take family vacations, etc.; to save for our retirement (between age 55 and 60); and to save for our children's education. Basically, we want it all and we are grappling with how to make it all happen. We recently came to the realization that paying off our house is a big factor in achieving the rest of our goals, so it has become our top financial priority."

Leigh, 31, a mother of two, says that she and her partner, Thomas, 30, have structured their financial lives in order to accommodate their shared desire to have her stay at home to raise their children. "One of the main financial priorities for our family is to make it possible for me to continue to stay home with the kids," she explains. "We also strive to save money for our retirement and our children's education. Money comes out of our account every month for these things, so we don't really have to think about them. There are more things we would like to be able to do right now, but they will just have to wait. We both agree that the most important thing is for me to be at home with the kids."

Some couples, like Kristin, 32, and Christopher, 35, parents of six children, find that there's a fair bit of negotiating involved at first. "Initially, as a couple, we needed to refine our priorities, to clearly define where we were going, and the steps we would take to get there. This was not always easy as our financial backgrounds were somewhat dissimilar. Lots of discussions, debates, and compromises were required in order for us to come to a meeting of the pocketbooks. It was made easier, however, by knowing that we each wanted a rural home; a simple-back-to-basics type of lifestyle; and a way of living that was in harmony with nature. Our priorities at this time are to create alternative energy sources for our home (e.g. wood stove, solar power) so that part of our savings can go toward this end. We are also planning on purchasing a large acreage within the next five years, and this is a financial savings priority as well."