Planning For Baby Takes Baby Steps

But before you get carried away by the thought of your future little one, consider a reality check, as you’ll need to get your financial house in order (and spoiler alert: kids have minds of their own and rarely humor parents for long).

In 2017, the USDA reported that raising a child born in 2015 would cost a whopping $233,610 from birth to age 17. While parents certainly don’t need to fork over the lump sum at delivery, a child will add nearly $14,000 a year to a household’s expenses. Most families manage; it just takes some planning to find a balance.

It all adds up...

How does something so small cost so much?

Costs add up quickly with newborns, particularly with a first child who may not benefit from hand-me-downs. For one, they require an inordinate amount of gear: cribs, changing tables, car seats, strollers and carriers, just for starters. Then, add the ongoing expenses of diapers, formula for those supplementing or not nursing, and clothing that is outgrown quickly.

Don’t forget the big-ticket items. A new addition may prompt a move to a bigger apartment or house, or a larger or second car may be needed to accommodate the baby and associated gear.

Moral of the story: start setting aside extra savings to help outfit a nursery and any major purchases anticipated.

Give your health insurance a check up

Review your health insurance policy. If you and a partner each have one, compare costs (premiums, deductibles and copays) and coverage to determine which provides the biggest bang for your valuable dollars.

Pay close attention to coverage for prenatal care, maternity care and dependent care, and be prepared to understand your options if difficulties arise, such as coverage for fertility treatments, premature birth and neonatal care. Also, your child will need their own doctor, so research and select a pediatrician within your provider network to contain costs.

how does something so small cost so much

Will you stay home, return to work or a combination?

Today’s workers often have remote or flexible scheduling options, making it somewhat easier to accommodate family life without sacrificing much-needed paychecks. However, many jobs still demand full-time, on-site commitment, and both staying home and working outside the home come with financial benefits and drawbacks.

If choosing to have one parent stay home, prepare for living on a tighter budget. It may not be all beans and rice, though, as you may save in areas such as a work wardrobe, lunches out, commuting costs, and of course, childcare.

If both parents work, childcare will be among your biggest expenses: according to, the average annual cost of center-based care for infants was $10,468 in 2016. You may be able to postpone childcare for a time. Review employer family leave policies, as you and your partner may be able to stagger leave to allow one parent to be home for your child’s first months.

Make your contingency plans

The joy of welcoming a child can be tempered by understandable worry. While no one wants to think of worst-case scenarios, planning can help alleviate anxiety. Think about naming a guardian, and update – or establish – estate plans to ensure your child would be cared for as desired.

Also, consider taking out life insurance policies for you and your partner. Term policies, for instance, are often affordable and can help a surviving parent through a child’s university years. And speaking of university, start socking away in a college fund as soon as baby comes home. Those costs continue rising, so every penny helps.

Keep up with your long-term savings goals

If all goes well, your children will leave the nest and make their own lives. It’s easy to want to give them everything, but be sure to take care of your own needs, too. Keep funding your emergency stash and retirement account as much as you’re able.