How to Prepare Your Family Finances for Having a Baby

Having a baby is expensive. This isn’t news to anyone. Yet the reality of just how expensive it is can be a shock to many first-time parents.

Doing everything you can to prepare your finances before you have a baby can help you to weather the change a little easier. Though you may never be able to plan for every eventuality, here are a few things you can do to prepare your family finances for having a baby:

Set a Budget

The first step to any financial planning is to set a budget. You will need it to understand what your expenses will be and how much you need to make (or how much you need to save). Set a budget for your current expenses so that you can find places to cut and to put aside money for savings (which you’ll definitely need later). Then set a budget for what you expect life will be like with your baby so you can be sure that your current income will cover it or so you can make adjustments in either your expenses or your income to make it possible.

Pay Down Debts

A baby will come with many unexpected expenses. You won’t be able to manage these if you are already saddled with debt. Pay down as many debts as you can before you have a baby. Your goal should be to be debt-free (at least free of credit card debt and other unsecured debt). This will help you to free up the extra money each month to tend to your family’s expenses and to put aside savings for any unexpected expenses.

Curb Impulse Shopping

Impulse shopping is one of the biggest obstacles to good financial planning, and it can lead to massive debt. To get your finances in shape for a baby, you are going to have to get your impulse shopping under control. Learn to recognize items that are wants rather than needs, and develop a system for purchasing items based on short- and long-term goals.

Build an Emergency Fund

Even with the best planning, unexpected expenses will arise. You must have an emergency fund in order to be prepared for these. Most experts recommend building an emergency fund that is worth at least six months’ salary. This should cover you for most setbacks, such as losing your job, becoming sick (or your baby becoming sick), or having an accident.

Get Good Insurance

If you don’t already have good insurance, now is the time to get it. Review your policy and find out what exactly is covered. You will need to make many visits to the doctor during pregnancy, and then there will be the massive hospital bill. Of course, there will then be many regularly scheduled visits for your baby, as well as many unexpected visits when your baby becomes ill. If your insurance doesn’t offer good coverage for these things, now is the time to shop for new insurance that does. Otherwise, you’ll be footing a very large hospital bill.

While you may never be able to truly plan for every expense that a new baby will require, you can make plans that will put your family finances in the best shape possible to welcome a new baby. If you are planning for a baby, make sure you review your finances honestly and take these and other needed steps to get your finances in shape.

What did you do to prepare your finances to welcome a new baby? Share your tips in the comments!

Carmen Guzlas is a writer and manager for, where she has recently been researching Homes for Sale in boston. In her spare time, Carmen enjoys gardening and making homemade soap.