Babies and Families

Tips to Help You Afford Your New Baby

Expectant parents are often filled with a mix of emotions ranging from excitement to worry. The miracle of bringing a new life into the world can also trigger the need to be financially prepared.

Can You Afford a Baby? Five Strategies to Prepare Financially

Having a baby is one of the biggest and most expensive moves you'll ever have to make. The U.S. Department of Agriculture recently estimated that the average cost of raising a child to 18 is about $240,000, and that doesn't even include the cost of college. Can your family afford a baby? Here are five strategies to help.

1. Get Serious About Budgeting

A baby and the cost of raising a child can put a serious strain on your budget. Not only will you need to support another person, your household income will also take a hit during maternity leave - or even longer if you or your spouse decide to become a stay-at-home parent.

To get ready, draw up a budget that adjusts for your new financial situation, and review our baby checklist for suggestions. Try to estimate how much extra you'll need to pay each month for your new little one. Include things like diapers, baby food, increased doctors' visits and even increased emergency savings as line items. If you or your spouse is not planning on staying home, and you're not fortunate enough to have a relative to help, remember to include child care as a budget item. As you outline these costs, you'll begin to see a better picture of your budget, and you'll be able to estimate how much you may need to decrease your other spending.

2. Practice Budgeting Ahead of Time

While drawing up a budget is a nice first step, the real challenge will be putting that plan into action. Before you have your baby, try living off your expected budget. Take the money that you would be spending on your child and put it into savings rather than spending it on yourself. This will help you get used to your new spending plan so it won't be a struggle when you actually have your child. Plus you'll have a nice sum set aside for emergencies should they arise.

3. Learn to Save On Baby Items

Think of everything you'll need to buy when you have a baby-a crib, baby clothes, toys, a car seat... the list goes on. If you buy everything brand new, you can spend a small fortune. Do you have any friends or family members with young children? You might be able to buy some of these goods second-hand. Try consignment shops and sales. Regardless of where you live, there are stores and even mothers' groups that resell baby goods at a fraction of the brand-new cost. Ask around for the sales in your area.

Buy your baby clothes in the off-season. Every store has a sale to get rid of their items from that season. So plan ahead. Buy your winter clothes in January, and buy them a size larger than you need right now. Repeat that process with summer sales. You'll be amazed how the cost of a coat drops to a fraction of the original retail price.

If you're planning a baby shower, hold off on your shopping until after the party as well. You'll likely get a good amount of what you need as gifts. And be sure to tell your friends to buy more than just newborn items. Your baby will grow faster than you imagine, and those cute little onesies will be too small in a flash. So ask for clothing and toys that take you all the way through the first year.

4. Prepare Your Emergency Fund

While an emergency fund is always important, this account becomes even more critical when you have a baby. A young child usually means extra trips to the doctor, last-minute shopping trips for essentials and unexpected days off work. You should have a decent sized cushion of savings to prepare for these events. Ideally, you'd have at least three-to-six months of living expenses tucked away in your emergency fund.

5. Set Up Life Insurance

Life insurance also becomes incredibly important for new parents. Take another look at your budget. Now imagine paying for everything only on one paycheck. According to the life insurance industry research group LIMRA, 70 percent of U.S. households with children would have trouble paying everyday living expenses if the primary wage earner died. Even nonworking parents should consider life insurance because if they died, their spouse would have to hire someone to handle all the chores at home. Losing a parent is a terrible emotional loss. At least with life insurance, you make sure your family doesn't take a financial loss as well.

There you have it. Five quick strategies to help you prepare for having a baby. There's an old joke that says if people actually waited until they could afford a baby, no one ever would. And it may seem that way when you begin to put together your plan. But trust us, taking a systematic and logical approach to budgeting and planning for your baby will go a long way toward helping make having a baby a more joyful-and less stressful-event.

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This article is for information and educational purposes only; does not necessarily represent the opinion of Protective Life; and, is not intended to serve as financial planning for having a child but, instead, to supplement other information specific to your situation. For information about Protective Life and its products and services, visit


Financial Strategies for Affording a Baby

Having a baby never seems like an affordable option. But taking a systematic approach to budgeting for a baby can really help. These five strategies for affording a baby are just the start. You'll have a lot of advice from family and friends, and hopefully you'll have a financial advisor to help guide you in the process. But even if you don't, your careful planning and diligence in budgeting will make a difference. Whether you're looking to save on baby expenses or you're trying to decide how to afford for a spouse to stay home, you'll need to look at your budget line by line. This article is just one of many articles and videos in our learning center. There are other articles on having a baby, planning for college or saving for retirement. We hope you'll take a minute to check them out. And if there are other topics you'd like for us to cover, send us a note on Facebook or Twitter. We look forward to hearing from you.