Managing the cost of starting a family

Turning Points 3 min read

You can’t remember ever being this excited about anything. You’re expecting a baby. What you may not be expecting is the price tag that goes along with it. According to the U.S. Department of Agriculture, the average middle-income family will spend close to $13,000 on baby care the first year alone.

But don’t let the cradle rock you. That cost estimate includes a move to a bigger home and buying a car. Right away, you can save a lot by staying where you live now and using public transit and shared rides. The fact is, with a little financial planning and creativity, you can provide everything your baby needs and still put something aside for the future. Here’s a look at the top things you’ll need to spring for in that all-important first year—and how to pay for it all.

Child care

When it comes to major expenses, child care is second only to housing, costing anywhere from $400 to $2,000 a month. One way to lower costs is to join another family or a group of local parents for a nanny share or shared babysitter. In addition to the cost savings, this type of shared care has the advantage of a more flexible schedule for you and more one-to-one attention for your baby.

If you’re considering a day care center, see if they have a referral program. Many centers offer a tuition credit for referring someone who enrolls their child. Some even offer rewards just for getting someone to tour the facility. It’s also worth asking if they have a prepayment discount. Some day care centers offer a discount (up to 10%) if you prepay for the entire year.


One thing’s for sure: Your new arrival is going to be hungry. If you can breastfeed, great. Not only is it healthy, it’s free. And even if you’re pumping and need to rent or buy the equipment to do it, you’ll probably still save money. If you use formula, opt for the powder over the prepared version. It only takes a few minutes to mix, and it will likely save you money. Choose the generic brand to save even more.

Once your baby is ready for solids, save big bucks by making your own baby food. While those pouches of organic carrots can average $1 to $2 a pop, all you need is a standard blender or food processor to whip up tons of healthy meals at pennies a serving.


First-year healthcare costs can be pricey and unpredictable. Wellness visits and vaccinations

coupled with random (and pretty much unavoidable) childhood illnesses can add up to big-time bills. To help budget for this, talk to your pediatrician to find out the average cost for checkups and shots. Then review your health insurance policy to know what’s covered and what you’ll be responsible for.

Be sure to check if the pediatrician you’ve chosen is covered by your insurance plan. Some plans only cover a select group of doctors; others allow you to see whoever you want, but it may cost you more. You can also expect to see your health insurance premiums go up a bit once the baby arrives. To avoid surprises, check with your insurance provider, and while you’re at it, be sure to add your new baby to your policy. Many insurance companies require you to do this within 30 days of the baby’s birth; otherwise, they may deny coverage and hold you responsible for all charges.

Baby gear

From bath seats and car seats to binkies and bouncers, babies need a lot of stuff. This typically falls into one of two categories. The first is one-time purchases, like a crib, changing table, stroller, playpen, car seat, or high chair. The second is ongoing expenses, like diapers and wipes, clothing, and toys. For first-time parents, the sheer number of things to buy can feel overwhelming, not to mention the cost. Fortunately, there are lots of ways to save:

  • Look for items that can grow with your child, like convertible cribs, high chairs, and car seats that can transition from newborn to toddler and beyond
  • Buy supplies in bulk and use subscription programs to save on everyday supplies like diapers and wipes
  • Join a rewards club, since most major baby brands offer coupons and all sorts of deals
  • Thrift it by shopping resale stores and garage sales for gently used items at a fraction of the cost
  • Wait for the shower and let family and friends help with some of the items you need off your registry

Saving for the future

Becoming a parent is one of the most joyful and amazing experiences there is. Once you have little ones, you not only want to buy them everything they need and want, you want to do everything you can to protect them. That’s why, of all the things to buy when they’re born, life insurance might just be the most important purchase you make. Find out how to protect your family’s future here.

In the spirit of transparency, this blog post is for informational purposes only. We know how quickly things change, so we can’t guarantee the content and links to unaffiliated parties are up to date.

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