Advice: Financial Fitness

Personal finance tips from Ellen DeSarno

The Financial Impact of Starting a Family

No one can deny that gay singles and families really have to prepare for the children that join their lives. With all the planning and commitment, any couple that has a child or children will tell you that it wreaks havoc on their budget. How can one little person cost so much?

INITIAL EXPENSES: This is one of the areas where it may cost more to be gay. There’s a somewhat unpredictable cost for inseminations, surrogacy or adoption. Get examples of costs in your area, and use common sense as to what methods you can afford.

HEALTH INSURANCE/HEALTH CARE COSTS: Will your current plan cover any of the start-up costs, such as fertility-related expenses? Most plans will not discriminate against same-sex couples trying to have a child, but make sure to confirm the coverage before you start. You’ll also need to know if your “new addition” will be covered under your health insurance, if you’re not the birth mother.

CASH FLOW: Your household budget may need to be adjusted for child care expenses (day care and babysitters), child product expenses (diapers and formula)—or changes in income, if you’ll be a stay-at-home mom. Check if your employer offers paid maternity or family leave.

DEPENDENT INCOME: You and your partner should evaluate your life insurance plans. Additional insurance may be necessary to protect the family in the event of one partner’s death. Life insurance is necessary for both income-earners and stay-at-home moms. Hiring a team of service providers to replace a stay-at-home mom may cost as much as $113,586, according to

ADOPTION: A few states still do not support a same-sex couple adopting a child, and some states and countries still permit discrimination in placement with LGBT parents. See the up-to-date map of statewide adoption laws at Consider working with an attorney who has experience in working with LGBT couples having or adopting children.

LEGAL ISSUES: There are fewer laws outlining the custody and inheritance rights of children with same-sex parents. Additional documents may be necessary to outline the rights of each parent and those of the child.

COLLEGE PLANNING: If your goals include providing a college education or private school education for your child, you should consider beginning to save for this goal as soon as possible! College can cost up to $60,000 per year at a private college. Financial aid, such as loans, grants and scholarships, may be hard to come by. Establish a target tuition amount with your financial professional, adjust it for college-cost inflation and put a savings plan in place. 529 plans are one of the many vehicles you may use to save for college on a tax-deferred basis.

Bringing a child into the world or to your home is a wonderful thing. Parenthood will test your pocketbook and your relationship, but it will be worth it. Remember this when you have a teenager, and your car insurance bill triples!

Ellen M. DeSarno, CFP®, CLU, ChFC is a registered representative who offers securities through AXA Advisors, LLC (212-314-4600), member FINRA/SIPC and an agent (CA Insurance Lic. #: 0H44952) who offers annuities and insurance through AXA Network, LLC, (AXA Network Insurance Agency of California, LLC; AXA Network Insurance Agency of Utah, LLC).  AXA Advisors and its affiliates and associates do not offer tax, accounting, legal counsel or any related advice or services. This article is intended for general information only, and AXA Advisors and its associates offer no guarantee as to its accuracy or timeliness. You should consult with qualified and appropriately tax professional and legal counsel regarding your needs, questions and particular circumstances.
GE 108761 (10/15) (Exp. 10/17)

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