Money, kids, and the myth of being “ready” with Taylor Nelsen, AFC
When people talk about the cost of kids, the conversation usually focuses on what you’ll spend. But for most families, the harder part is understanding where the money pressure actually comes from — and how those costs show up over time.
In this episode, we talk with Taylor Nelson, an accredited financial counselor and the voice behind The Financial Planner Substack. Taylor is also a parent of two little ones, which means she’s not only looking at the numbers — she’s living the day-to-day reality of them.
The big takeaway: the “cost of kids” isn’t just diapers and strollers. It’s childcare, yes, but it’s also the hidden cost of time, flexibility, and income you might lose (temporarily or long-term) when your life changes.
Episode timestamps
[03:00] How becoming a parent changes budgeting — less line-by-line, more “one-number” simplicity
[07:00] The costs that surprise people most: Childcare, and the income hit from parental leave, or career pauses
[12:00] When you think you’ll go back to work… then you meet your baby and everything shifts
[14:00] What to do before baby arrives: Health insurance math, hospital indemnity insurance, and childcare waitlists
[16:00] “Order of operations” for saving when kids are in the future (and money is tight
[20:00] How to prioritize retirement vs. college savings — and why it’s rarely all-or-nothing
[25:00] The tax benefit people mess up: Dependent care FSA rules and childcare “under the table”
[29:00] What parents who feel behind need to hear — kids want attention, not perfection
[33:00] How Taylor talks about money with young kids (and why grocery store trips count)
37:00] One small step that makes everything easier: More cash savings for flexibility and peace of mind
Parenthood changes your budget, and that’s not a failure
Taylor shares something so many perfectionist budgeters need to hear: when you become a parent, the “perfect” system often stops working — not because you’re doing it wrong, but because your time and bandwidth are suddenly precious.
She used to do a detailed, line-by-line budget with maximum control. Now? It’s more like:
bills on autopay
one flexible-spending number to aim for
attention focused on what actually can be controlled
That shift isn’t “giving up.” It’s adapting to reality. And honestly, she thinks it may be healthier.
Some kid-related costs are just facts of life. Taylor mentions paying $500/week for childcare, and the point isn’t that everyone will pay that exact amount — it’s that childcare can become a fixed cost you can’t spreadsheet away. So instead of obsessing over it daily, you build it into the plan and preserve your energy for everything else.
The biggest surprise cost isn’t always diapers, it’s income
The “average” cost of raising a child from birth to 18 (not including college) is around $250,000. But Taylor’s quick to point out this number is not entirely helpful, because the range is massive depending on where you live, your childcare setup, and your family’s choices.
But the cost she sees people underestimate the most?
The cost of not working, or working less, or losing momentum in a career.
Some of that is obvious — unpaid leave, reduced hours, or taking a full pause.
Some of it is sneakier:
Less retirement saving during those years
“Holes” in Social Security earnings history
Slower career progression after returning
Fewer opportunities you can say yes to while exhausted and sleep-deprived
Taylor also names something many people feel but don’t say out loud: Sometimes it’s not worth it to force a full-time work schedule when you’re running on four hours of sleep and barely functioning. The “logical” decision on paper isn’t always the best decision for your mental health, your family, or your long-term sustainability.
If you’re planning for a baby, start with these high-impact moves
If you’re trying to get financially ready for a baby (or even just feel less panicked), Taylor recommends focusing on the stuff that can swing your costs the most.
Understand your health insurance costs before you’re in the hospital
Delivery costs can range wildly — Taylor has seen totals as low as a few hundred dollars and as high as tens of thousands.
If you have the ability to change plans during open enrollment, this is one of the most practical “adulting” moves you can make ahead of time. Compare the total out-of-pocket max, not just the monthly premium.
Look into hospital indemnity insurance
Taylor mentions hospital indemnity insurance as a potential strategy. If you’re admitted to a hospital, the policy may pay you a lump sum of cash. For some people, that cash can help offset delivery costs or other baby-related expenses.
Important note: Eligibility, timing, and policy details matter a lot here — but it’s worth researching if it’s available through your employer or marketplace options.
Plan for parental leave like it’s part of your budget (because it is)
The U.S. doesn’t have universal paid leave, and what’s available varies by employer and state. Taylor also emphasizes that there may be programs you don’t know exist — especially state-specific paid family leave options (including some that self-employed people can opt into).
A good starting point is simply to list what income would look like during leave, and compare it to your fixed bills. That math alone can reduce a lot of uncertainty.
Start the childcare search early
In some areas, people get on daycare waitlists as soon as they’re pregnant (sometimes earlier). It’s not dramatic — it’s just the reality of supply and demand in childcare.
Even if you’re not sure what you’ll do, gathering real prices and timelines in your area helps you plan with facts instead of vibes.
Retirement vs. college savings: It’s not a moral test
Taylor’s take on retirement vs. college savings is refreshingly grounded: most families can’t do everything, and the parents you see “doing it all” are often a loud minority — not the baseline you should measure yourself against.
Her approach is to show the tradeoffs in plain numbers:
“If you contribute $X/month to a 529, it could grow to $Y in 18 years.”
“If that $X comes from retirement contributions, here’s what that likely costs you later.”
That doesn’t mean “never fund college.” It means you deserve to make that choice with your eyes open.
It’s also worth remembering that your kid might not choose a traditional four-year education. And community college, trade school, scholarships, or financial aid can change the equation.
If you’re financially secure and want to set your child up, Taylor mentions a few common options people consider:
529 plans
Taxable brokerage accounts earmarked for the child
Other asset-based plans (like intentionally owning a home or car with “future kid use” in mind)
If you feel behind, your kid probably doesn’t agree with you
Kids need love, attention, and care more than they need perfectly optimized finances.
Taylor shares that her young child’s “dream year” included more snuggles and a trip to Trader Joe's for samples — not elite activities, not expensive stuff, and not the kind of thing parents doomscroll about at 2 a.m.
A lot of financial guilt comes from expectations we absorb without realizing it. But parents get to decide what those expectations are in their homes. Ideally, you involve your kids in your household’s money culture by openly discussing money with them. Even small moments — like letting a child “pay” at checkout, or talking out loud about saving for a trip — can normalize healthy money conversations.
You may never feel ready for kids (but that doesn’t mean you shouldn’t have them)
Taylor flips the “I’m not ready” fear into something more honest: Most people do big life things before they feel perfectly financially ready. And the people who worry they aren’t ready are often the ones who’ve already thought about it more than most.
Being realistic matters. Planning matters. Saving helps.
But “perfect readiness” isn’t a thing — and waiting for it can turn into a moving target.
TL;DR
Childcare costs are often the most visible expense, but lost income and career pauses can be the biggest long-term cost of having kids.
A simple budgeting system can be more sustainable as a parent.
Before your baby arrives, focus on health insurance math, leave planning, and childcare waitlists.
If you’re choosing between college savings and retirement, run the numbers — it’s usually about tradeoffs, not right vs. wrong.
The most powerful “prep” move is extra cash savings — flexibility reduces stress more than perfection does.
Resources:
Taylor’s website: tailoredfinancialplans.com
Taylor’s Substack: The Financial Planner
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Disclaimer: This post is for educational purposes only and is not personalized financial, tax, or legal advice.
