How am I going to afford a baby?


Editorial team Published on

To afford having a baby, you need to plan ahead by adjusting your budget, maximizing workplace and tax benefits, and cutting gear costs using second-hand networks.

Budget and Expenses

  • Separate needs from wants: Distinguish between absolute essentials (car seat, safe sleep space, diapers) and non-essential gadgets.
  • Build an emergency fund: Save extra cash before the birth to handle unexpected medical bills or a temporary drop in household income.
  • Plan for child care early: Research local daycare waitlists and costs immediately, as child care often becomes a family's largest recurring monthly expense.

Saving on Gear and Supplies

  • Use local networks: Acquire second-hand clothing, toys, and high chairs through Facebook Marketplace or local 'Buy Nothing' community groups.
  • Build a registry: Create a comprehensive baby shower registry to let friends and family help cover essential gear and supplies.
  • Stockpile consumables: Buy diapers and wipes slowly over time before the baby arrives to spread out the out-of-pocket costs.

Insurance and Tax Benefits

  • Review health coverage: Check your health insurance policy to understand out-of-pocket maximums for prenatal care, delivery, and adding a newborn to the policy within the required window (usually 30 days).
  • Utilize pre-tax accounts: Enroll in a Dependent Care Flexible Spending Account (FSA) if your employer offers one to pay for child care using pre-tax dollars.
  • Claim tax credits: Research eligibility for the federal Child Tax Credit and other state-level family tax credits.