Four Wise Financial Moves for Expecting Parents

Having a baby these days carries a steep price tag. Economists estimate a middle class family will spend between $12,350 and $13,900 annually – or $233,610 from birth through age 17 – on child-rearing expenses.1

Lower income families are expected to spend $174,690, and families with higher incomes are expected to spend $372,210 from birth through age 17. Of those costs, families are projected to spend 29% on housing, 18% on food, 16% on child care and education, 15% on transportation, 9% on healthcare, 7% on miscellaneous items, and 6% on clothing.

With a little forethought and planning, however, you can avoid being blindsided by child-rearing costs and instead focus on the immeasurable joy of becoming a new parent. Here are some tips to help you become financially prepared:

  • Hike up your emergency fund savings. Start putting a little more into your emergency fund and you’ll be glad you did when an emergency arises. Experts say you should have three to six months’ worth of living expenses stashed away in an emergency fund. A good rule of thumb is the bigger your family gets, the bigger that fund should be. Remember to pay yourself first.
  • Pay off or pay down debt. With the added expenses that a new child brings, paying interest on credit card debt should definitely not be a household budget item. Paying off existing debt and not accruing new debt is a wise financial move. One way to pay off existing debt is by using the debt stacking method.
  • Start a college fund. Start saving for college before your baby arrives and you’ll have 17 years to work towards that goal. If your child doesn’t go to college, you can always move those savings somewhere else.
  • Consider protecting yourself. Do you have a will? Life insurance? These are a couple of things that become increasingly important once there are children in the picture.


1, “Families Projected to Spend an Average of $233,601 Raising a Child Born in 2015,” January 9. 2017

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