The Financial Side of Babies


My baby
My baby

Whether you’re expecting a child or planning to start a family in the near future, financial changes are inevitable. Babies are expensive, and if you don’t fully understand the financial side of having children, you might get caught off guard. Expanding your family before you’re financially ready can heighten your stress level. And even if you have the money talk, you might overlook a few important expenses.

So, what financial changes can you expect when you expand your family?

1. Loss income. Sometimes, it makes financial sense for one parent to stay home – especially if the cost of daycare and commuting takes a chunk of the household income. But even if both parents work, it’s common for mothers to take six to eight weeks off from work. Yes, there is maternity leave, but this compensation is only a percentage of a mother’s regular pay.

2. Baby supplies. Mothers can save a lot of money by breastfeeding their infants, but they can’t escape other expenses. Supplies you’ll need include diapers, wipes, clothing, baby food, toys, strollers, nursery furniture, a car seat and other equipment. Some purchases are one-time, but the weekly or monthly recurring expenses can add up quickly.

3. Daycare. Unless a grandparent, friend or other relative is willing to watch your little one for free, make sure you allow room in your budget for childcare. Rates vary depending on locations. But on average, you can anticipate paying about $125 to $140 a week for childcare.

4. Health insurance. Thought your health insurance premiums were high with only two adults on the policy? Imagine the cost once you start adding children to your policy. This is an expense that many expecting parents overlook. Maybe your employer helps with the cost and pays a percentage (or all) of your coverage. But if not, coverage for a family of four can run over $600 a month.

Yes, babies are expensive and your finances may never be the same after their arrival. But if you plan ahead and start saving your money, you can make this transition with ease.

  • Cut out the extras. Maybe you’re accustomed to eating out every weekend night or planning last-minute trips. To prepare for future financial changes, you’ve got to make lifestyle changes. If you normally waste $300 a month on needless expenses, saving this money can put $4,800 in your pocket by the end of the year. This cash can go toward daycare, baby supplies or compensate for lost income during your maternity leave.
  • Changing your utility rates. How much do you spend on energy each month? Shop around and compare rates with other providers to lower your monthly cost. For example, if you live in New York you can visit to locate a cheaper provider.
  • Automatic savings. If you’re not a good saver, consider alternate options. You can have a percentage of your check direct deposited into your savings account, or you can take advantage of options offered by your bank. For example, for every purchase with your debit card, some banks will deposit $1 into your savings account. This may not seem like a lot, but dollars add up.

Having a baby can complete your family and bring you joy. Parenthood is already stressful, and the less you have to worry about finances, the better. But you can provide for your child by preparing for future expenses and being smart with your money.

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