Illustration: Cristi Cash
4 min read

Preparing for a Baby

Are you adding a child to your family? Congrats! Whether it be through birth or adoption, parenthood is very fulfilling for many people.

Preparing to add a child to your family can be a daunting task. As with any major life change, if you have a better grasp of the financial requirements and tasks, you can be prepared and have a high chance of success.

According to a 2017 study by the U.S. Department of Agriculture (USDA), it will cost approximately $233,610 to raise a child born in 2015 to age 17. This works out to be about $14,000 per year (though according to NerdWallet, many families spend more money the first year; between $20,000 and $50,000, including housing and transportation). The USDA estimates do not include the cost of the hospital or birthing center, medical professionals, fertility care, adjustments to income due to one parent staying home, or the cost of adoption.

That’s a lot of money! But don’t fret; there are many things you can do to prepare for such a change.

Plan

Plan things one step at a time. Ask relevant questions, such as:

Will you (or your partner) take parental leave?

Though the United States does not offer universal paid parental leave, many employers offer some kind of maternity leave, and may include some portion of it as paid time off. In fact, the Family and Medical Leave Act allows eligible employees to take up to 12 weeks of unpaid leave after the birth of a baby. Talk with your boss and your HR department to see what you can arrange. Don’t forget to explore options for paternity leave, as well. If no paternity leave is officially available, talk with your partner. You may still be able to save vacation time or other paid time off.

Will you plan on a hospital, birthing center, or professionally-assisted home birth?

Illustration: Cristi Cash

Be sure to include the financial aspect in your research. Does your health insurance cover a specific method and not others? Are your doctors and other prenatal professionals covered under your insurance plan? These kinds of questions are very important. Meet with the birthing professionals or institution beforehand to clarify billing procedures and to make as many arrangements as possible before the baby gets here.

How much will you plan on spending on your child per month for the first year?

Will you buy most things new, or can you buy second-hand or borrow? While it is very important to buy some things new for safety reasons (car seats and strollers, for example), many other expenses can be reduced through buying things secondhand—or even borrowing them! Baby clothes, toys, diaper bags, and other necessities can break the bank if you’re not careful. Take a good look at your budget and see what you can reasonably afford.

Are there existing medical or other conditions for the mother or child which will require special treatment?

While most people can’t know this answer for sure, it is something to consider. For example, if you plan to adopt a child with special care requirements, or if the mother has special medical circumstances, take a look at those extra costs and budget them in as best you can.

Act

Once you have a plan in place, it’s time to get ready. Take a look at your (written) budget. (Don’t have one? Click here for budgeting resources!) Talk with your partner and decide where to make adjustments to accommodate your new child’s expenses.

If possible, start setting aside the amount you plan to spend on your child each month and put it in its own account. If one partner plans to stay at home after the baby is born, ease your way into living on one income and set the rest aside in the baby account, too. This way, you can make the financial shift before your child arrives, AND you have some extra money put away for unexpected (or expected) expenses. If things are too tight, talk with your partner and decide where you can adjust your new budget.

Disclaimer
While we hope you find this content useful, it is only intended to serve as a starting point. Your next step is to speak with a qualified, licensed professional who can provide advice tailored to your individual circumstances. Nothing in this article, nor in any associated resources, should be construed as financial or legal advice. Furthermore, while we have made good faith efforts to ensure that the information presented was correct as of the date the content was prepared, we are unable to guarantee that it remains accurate today.

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