Image Source: 123rf.com
There is little else more exciting than bringing a new baby into the world. While I didn’t plan either of my children, I can see the benefits of planning parenthood and trying to pinpoint a savings goal before your life changes forever. Planning ahead can give you more confidence in your ability to provide for your newborn baby. But who knows how much to save for a baby? Here are some things to consider.
1. Hospital and Medical Costs
One of the first major expenses comes before the baby even arrives—labor and delivery. On average, a vaginal birth without complications can cost more than $10,000 with insurance, while a C-section may cost even more. Don’t forget prenatal visits, lab tests, ultrasounds, and postpartum care. If you don’t already have health insurance, now is the time to get a good plan. You may also want to set aside extra funds for unexpected complications or out-of-network charges. A good rule of thumb is to save at least $4,000–$6,000 for medical costs alone.
2. Baby Gear and Essentials
The gear you’ll need includes a crib, stroller, car seat, changing table, clothes, and diapers—just to start. Depending on your choices, this can cost anywhere from $1,500 to $3,000. Consider buying gently used gear for items like swings and baby bathtubs to save money. Some parents also host baby showers to help offset initial costs. Still, it’s wise to build a $2,000 cushion to cover gear and nursery setup.
3. Childcare and Parental Leave
If both parents plan to return to work, childcare can be one of the largest ongoing expenses. Daycare can range from $800 to $2,000 or more per month depending on your location. Nanny services cost even more, and infant care is typically the most expensive. Some employers offer paid parental leave or flexible spending accounts (FSAs) to help. If possible, start saving for three to six months of childcare expenses before your return to work.
4. Diapers, Formula, and Daily Supplies
Newborns go through 8 to 12 diapers per day, which can add up to over 3,000 diapers in the first year. Formula, if needed, can cost $100 to $150 per month. Add in wipes, creams, pacifiers, and baby food down the line, and you’re looking at a significant monthly expense. Breastfeeding can reduce formula costs, though it may come with other equipment needs like pumps or nursing bras. Budget around $75 to $100 per month for basic baby supplies.
5. Emergency Fund and Long-Term Planning
An emergency fund is essential for any family, and it becomes even more important once you have a child. Experts recommend three to six months’ worth of expenses in case of job loss or medical emergency. You may also want to open a 529 college savings plan or start contributing more to your retirement. Children change your financial landscape, and long-term planning ensures you’re not caught off guard. It’s also smart to re-evaluate your insurance policies to include life and disability coverage for added protection.
Start Saving Early for a Smoother Journey
We didn’t have time to save much when we had our first baby because she was a surprise (and so was our second). That said, if you are wondering how much to save for a baby, you’re on the right track to giving your child a great start in life. While the direct answer to this question will vary, based on your lifestyle, location, and other needs, the average first-year cost can be $14,680 to $36,050 or more. Those numbers probably seem overwhelming right now, but breaking them down into smaller savings goals can make everything more manageable.
How much did you save for your first baby?
Read More
How Much Retirement Savings Should You Have by 40 If You Want to Retire By 60?
Saving To Be A Millionaire – You Just Need $1.44 Per Day
GIPHY App Key not set. Please check settings