Whether you’ve been planning for your pregnancy or not, the nine months leading up to delivery is an undeniably stressful time. From routine check-ups and building a nursery to creating a baby budget and starting a college fund — there will be a time that you seek answers to help you prepare.
In this post, we break down the most important financial considerations to think about during your nine-month pregnancy. Each section, broken up by trimesters, includes a printable to help you manage your expectations and prep for your little one. Use the checklist, worksheet, and baby budget templates to help understand how much a baby costs per month and how much you’ll need from savings or a personal loan to comfortably position your family for financial success when the baby arrives.
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Averaging the cost of delivery across the most expensive and least expensive states, hospital bills for having a baby are a median $14,066, according to the Health Care Cost Institute. That price does not include the cost of prenatal and wellness visits before delivery, and the first full year of your baby’s life. All in all, The USDA estimates that a middle income family can expect to pay $12,980 during a baby’s first year of life.
Learning how to start saving money for a baby includes building a budget with priorities, sticking to that budget, and anticipating unexpected expenses. While there are some consistent ongoing costs you can expect like food and diapers, you’ll often encounter emergencies that you hadn’t anticipated. To best prepare for the unknown, consider the following best practices:
The largest expense for a baby’s first year is the delivery. While the cost varies significantly between states, the Health Care Cost Institute estimates the average price tags range from $8,361 in Arkansas to $19,771 in New York.
Consider the below example of pre-birth baby expenses including delivery:
|Estimated Pre-Birth Baby Expenses Example|
|Co-pay||$30 (per visit)|
|Percentage of coinsurance coverage||30% of bill|
|Total Estimated Cost: $9,850|
Delivery costs can vary widely, and oftentimes, complications can raise the overall bill. Understanding your deductible, out of pocket maximum, and coinsurance coverage can help you manage your expectations. Refer to your insurance policy for specific policies.
Developing a personalized budget for your baby can be a complex process. These step-by-step templates break down the budget by necessities and nice-to-haves. Those values create a comprehensive plan in the final template that allows room to make adjustments as you realize additional expenses and income month over month.
A baby budget template allows you to visualize expected costs versus actual spending. Download the template below to create a rough budget. Use the “Baby Budget Planning Worksheet” and “One-Time Baby Expense Checklist” to estimate expenses in the goal spend column, then log the actual expenses each month in the following columns to track spending.
When you’re in your first trimester, focus on the following financial goals:
When you find out you’re pregnant, there are a few steps to take right off the bat to help with a safe and healthy pregnancy. First, contact your primary care physician and schedule a prenatal visit. In the early stages of your pregnancy, you’ll need to understand your coverage for your own check-ups and wellness visits. Down the road, you’ll need to know what’s covered under a family plan.
While you don’t need to up your coverage until closer to your due date, you’ll want to understand what’s included in your current policy and budget for an increase to your premium when the time comes. Consider the following:
During your first trimester, you should focus on paying off any high-interest debt. Consider your options, like consolidating your loans, refinancing for lower interest payments, or switching your credit card to one with lower fees.
Next, begin to document your expenses meticulously. Understanding the cash flow that comes in and out will help you create a more accurate budget for your newborn.
In month two, it’s time to get a better picture of your financial situation. Check your credit score from the three major credit bureaus — Equifax, Experian, or Transunion. Go through the report and determine if there are opportunities to improve your score. As a new parent, you may find yourself in a situation where you need a larger house or a more functional vehicle. Making sure your credit score is in good shape now can help finance the necessary family upgrades later on.
“Your best bet is to start small: Try to stock away enough cash to cover pregnancy costs and living expenses during your maternity leave (since many employers don’t offer paid time off).”
—Colleen de Bellefonds, Editor, What to Expect
Before getting carried away purchasing baby-everything, consider a shopping strategy. It’s easy to rack up overdraft fees on newborn purchases, especially with some of the larger ticket items. Instead, write down how much disposable income you have to spend on one-time purchases each month. Factor in gifts from baby showers and family, then decide what’s essential for the first few months of life and create a timeline to purchase these items.
Creating a budget as early as possible will help you set expectations for overall spend during your baby’s first year of life. Download the baby budget template and create an estimated budget based on the expenses you logged in earlier months, plus the estimated ongoing and one-time costs of your newborn. Factor in any changes to income during maternity leave or from moving from a two to a one-income household. Don’t forget to include expenses like college savings, a retirement fund, and pet expenses.
Use the worksheet below to estimate the total cost of your first year of parenthood. Calculate the cost of a single purchase, then include the times per month you’ll need to make the purchase and the total. Then, enter the values in the baby budget template to find the difference between estimated expenses versus actual cost.
When you’re four to six months pregnant, focus on the following:
As you enter your second trimester, it’s time to make decisions about your work-life balance. Cost-justify moving to a single-income household versus childcare. As a single parent, understand the time commitment of childcare dropoff and pickup — or the price tag of an in-house nanny. Additionally, consider the size of your savings if your parental leave is unpaid. Outside of the financial aspects of a career change, you’ll want to weigh the psychological impacts.
Following your decision to continue or leave your career, you’ll need to understand the maternity leave policies at your current position. In most cases, you’ll need to give ample notice to your employer before you take leave. Talk to your employer or HR department to understand:
As you near the end of your second trimester, it’s important to practice your set budget. Having the additional cash you’d spend on your child earlier allows you to put money aside for emergencies or college and retirement funds.
“[When you create a plan] at least you get clarity on the ideal situation and more chance of welcoming your baby as you'd like to.”
—Dr. Laura Markham, Founder, Aha! Parenting
Consider short-term accounts with high-yield interest to make the most of your short-term savings. Especially if you’re moving from a two to a one-income household, you’ll want to practice the adjustment now so the cash flow difference doesn’t create shock when your newborn arrives.
Understanding how much you’ll spend on your baby’s first year is more than just the cost of diapers per month. You’ll need to decide what’s worth the splurge and where you can save cash by writing down your needs. Use this worksheet as a guide to determine which one-time baby expenses are necessary during your first year of parenthood, then adjust your budget to accommodate.
When you’re seven to nine months pregnant, focus on the following:
As a new parent, at some point, you’ll experience an unexpected hurdle. Having insurance and being financially prepared for an emergency are the best ways to mitigate the risks as a parent. Take out a life insurance policy and write a will. Choosing a guardian before the baby is born will help manage stress levels and emotions after you have your newborn.
If you plan to set up a college savings account, it pays to do it early. Tax-advantaged programs such as 529 investment plans allow you to choose your own investment strategy and, best of all, you can do the paperwork before you have the baby’s Social Security number. These plans allow for outside contributions, so it’s worth sharing the account with friends and family during baby showers as a gift option.
At this stage of your pregnancy, take a step back and look at your own retirement savings. While having a baby may warrant other budget cuts, consider leaving your 401K contributions where they are. For parents who are no longer working, IRA contributions are a great way to keep building towards a retirement fund. When your baby is old enough, have a conversation about your progress with your long-term savings, even if it was something you struggled with. Teaching kids financial literacy lessons early can help set them up for success later in life.
In the last month of your pregnancy, it’s time to finalize your baby’s insurance coverage, and set them as the beneficiary of your life insurance and retirement plans.
The majority of insurance providers allow a one-month window to add your newborn to your policy, but beginning to fill out the enrollment forms early, leaving only the final details like name and birthdate, can help reduce stress as you learn to manage parenthood.
“If you live in a home that’s not cheap, and you can’t rely on wealthy parents to take care of your kids if something happens to you and your spouse, consider having several million dollars in level term insurance,”
—Ian M. Weinberg, CFP, CEO of Family Wealth & Pension Management
Pregnancy is difficult without the additional stress of budgeting for a newborn in your life. Luckily, these tools can help simplify the process and get you on the right track before beginning your family.
Successfully planning for your baby’s first year of life may come with some successes and missteps. The most important thing to remember is that you can always overcome obstacles you may face, even if you’ve experienced financial hardship. If you need cash in the short-term, consider a credit-building loan to support your family’s long-term goals.