12 Budgeting Tips for New Parents

Middle-class families spend nearly $13,000 per child every year. Learn how to budget strategically.

By Andrea Woroch, US News & World Report

Try to build your emergency funds to six months’ worth of living expenses.

CONSIDERING FAMILIES spend approximately $13,000 annually per kid on child-related expenses according to a 2015 study from the U.S. Department of Agriculture, underestimating how much it will cost to have a baby can cause anxiety for first-time parents.

This is a special time and you want to be bonding with your new baby, says Brittany Kline, co-founder of The Savvy Couple, a personal finance blog. “Being a new parent is stressful enough and you shouldn’t add money stress into the mix,” she says.

Fortunately, there are simple and strategic ways to create a baby budget. Here are tips to help you get your finances in order, so you can maximize enjoying time with your newborn and minimize stress.[ 

Understand How Much It Costs to Have a Baby and Start Saving

The costs of caring for a baby start well before your new bundle of joy arrives, thanks to maternity clothing, prenatal care and birth-prep classes. To alleviate this stress and avoid taking on debt, start saving money as soon as you find out you’re expecting.

Figure out just how much you need to save by understanding what your health plan covers for prenatal care, delivery fees and hospital stay and infant wellness visits, as well as the type of benefits your state and employer offer for maternity or family leave. Speaking with other parents you know who have older children may help you realize the additional expenses you will need to prepare for that you may not have considered.

“Try to build your emergency funds to six months’ worth of living expenses,” says Henry Hoang, a certified financial planner at Bright Wealth Advisors, a registered investment advisory firm in Orange County, California. “If it means cutting down on some of your discretionary expenses now to save, you’ll be very grateful for the peace of mind after having your baby.”

There are a variety of commonly overlooked expenses that can cause you to overspend, including parent-bonding classes, additional babysitting services and extra doctor visits. Researching all the potential expenses that come along with caring for a child is crucial for setting a realistic budget.

“You don’t want to be caught off-guard and stressed about any potential costs that you didn’t plan for,” Kline says.Play Video

Estimate Medical Costs

The cost of giving birth often shocks new parents, with fees ranging from $5,017 to $10,413, depending on location, according to data collected by Fair Health, an independent nonprofit that manages the nation’s largest database of privately billed health insurance claims. These bills become even costlier for a cesarean surgery or if any complications arise during delivery. Other medical bills to account for include prenatal doctor visits, ultrasounds, lab work and other tests. After the baby arrives, there is also postnatal care, pediatrician visits for illnesses, possible medication and other potential procedures to consider.

Factor in Nursing and Feeding Expenses

Though most women get access to a breast pump through their health insurance plan at no cost, storage containers and bottles are still needed to feed your baby. You may want lactation support or supplements if you’re experiencing difficulty with milk production. In addition, there is a need for nursing garments and some families turn to formula to supplement their feedings, which will run as much as an average of $1,200 to $1,500 for the baby’s first year, according to the Office of the U.S. Surgeon General.

Account for Extra Child Care Costs

Child care is one the biggest expenses working parents take on and the cost is often more than they plan for. According to Care.com, the average weekly child care cost for one infant child is…

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