Having a baby is one of the greatest joys someone can experience in life, but it is also one of the costliest. The cost of preparing for an infant will depend on where you live and personal decisions, but on average, families can anticipate spending at least $15,000 in the first year‡. However, while you may experience some initial sticker shock, there are several actions you can take now to prepare for the expense.

Preparing for the medical bills

One of the first costs you will incur when you find out you are expecting is the doctor’s bill. According to the Kaiser Family Foundation‡, the average cost of pregnancy and childbirth is nearly $19,000. If you have insurance, your benefits will likely cover a large portion of the bill, but you may still have several thousand dollars of out-of-pocket-expenses to budget for.

To understand your individual expense responsibility, carefully review your health insurance details. If you have employer-provided coverage, you may have several options from which to choose. If this is the case, carefully compare the different plans to determine which one offers the best coverage for your needs, and submit the coverage request promptly after your child arrives.

Your doctor’s office should also be able to help you forecast expenses for the pregnancy, including the different tests, ultrasounds and visits the mother will need.

You can also consider using your health savings account (HSA) and flexible spending accounts (FSA) to pay medical bills. Both accounts pull money from your paycheck pre-tax, which provides added benefit. Finally, don’t be afraid to ask about payment plans with the doctor’s office or hospital if a lump sum payment presents challenges.

Preparing for the baby items

Babies require a lot of gear, diapers, food, and clothing. There are several baby cost calculators‡ you can use to estimate expenses. By using these tools, you can plug in different expenses and see a list of potential costs to help you budget. When it comes time to begin buying everything you need, try to spread out the purchases and watch for sales. Also, be sure conduct plenty of research and read product reviews to ensure you’re making the right choice for you and your baby.

Additionally, use social media to your advantage. Search for parenting Facebook groups where you can buy gently used clothing or toys. Also, look for different discount codes through influencers, but be careful to avoid buying products just because they’re a “good deal.” Finally, talk with family and friends to see if there is anything you can borrow as babies quickly outgrow clothes, gear and toys.

Last but not least, diapers could end up being one of your largest expenses and something you need to input in your budget for years. The National Diaper Bank Network‡ notes the average monthly cost of diapers is $70 to $80 per month. If diapers will place a financial burden on your family, research your local community options to find a diaper bank. You can also consider having friends and family throw you a diaper shower, where the guests bring diapers as gifts, to help you offset some of the cost.

Preparing for the daycare/childcare expenses

If you work, you will likely need to find safe, reliable care for your infant. Depending on where you live, childcare costs could range from $10,041 to 16,945 a year. You can see the average cost for your state by visiting the Economic Policy Institute‡.

If your employer offers a dependent care FSA‡, review the information to see if this may be a good fit for you. This account lets you put pre-tax dollars toward daycare costs, which lowers your taxable income. Then you can pay yourself back throughout the year. While this doesn’t cover the entire annual cost of care, it can still help.

This can be a daunting cost for many but lean on your banker to help you determine a budget for your family to ensure you can afford the care needed for your child.

Preparing for long-term savings for the child

While you discuss your new budget and financial changes with your banker, be sure to ask about long-term savings options for your child. Once your child is born, consider opening a 529 account to start saving for educational expenses like private school or college. Your bank could also offer a youth savings account for your child so you have a safe place to deposit money the child might receive on their birthday or holidays.

In addition, talk with a financial advisor about if stocks, bonds or CDs are a better option to save for your child’s future.

Preparing a baby-friendly space

With all the new baby stuff that you will quickly accumulate, it may feel like your walls are busting at the seams. If this is the case, you may need to decide if you want to buy a new home, move to a different rental or stay where you are and make updates. Each of these decisions brings with it a different financial strategy:

  • If you would like to buy a new home, talk with your banker about getting pre-qualified for a mortgage, and learn how a monthly mortgage payment would fit in your budget.
  • If you decide to rent, talk with your banker about how your current rent – or new rent if you move – would fit in your monthly budget.
  • If you decide to stay in a house you own and want to make improvements, discuss if a home equity line of credit would be beneficial.

Finally, you might need a larger car to accommodate your new family member. Your banker can walk you through how much you can afford and what an auto loan may look like. If you decide to buy a new car, don’t forget to ask about insurance, repairs, and gas mileage so you can estimate costs during the car’s lifetime.

Preparing your documents

Finally, with the responsibility of a child comes the need to ensure you have your wishes stated in a will or trust. In a worst-case scenario situation, your loved ones will have less stress if your documents are prepared, and your preferences are clearly stated.

Becoming a parent is a huge life event. As you prepare to grow your family, work with your banker on a full financial review so you can forecast expenses and build a plan that is personalized to you.

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