Taking in account the value of today’s dollar, the United States Department of Agriculture (the USDA) has speculated that a newborn baby will cost a middle-income family more than $165,000 from conception to the time he or she turns 18, and that’s just taking one child into consideration. However, that amount isn’t including such factors as; Adoption costs (if applicable), fertility treatments (if needed), private education, extra lessons, college, etc; All of which can stack on an additional $100,000 to $300,000 to that already high number. Even by just being conceived, babies are estimated to cost between $6,800 to $10,600; A number which is dependent of residency, type of birth (Natural birth is less expensive than a cesarean), prenatal care (such as exams, check-ups, vitamins, etc), labor, and delivery. Then there’s the first year expenses which consist of doctor’s visits, baby clothes, baby furniture, day care, diapers, food, and so forth; All of which will likely have you shelling out about $20,000 before the baby even turns 1 years old.

Considerating the huge bill that comes attached to a baby’s birth, it’s ideal to start planning ahead of time financially if you’re intending on welcoming a baby into the family in the future. It’s important that you know how to prepare for a newborn when it comes to financing; While the rewards of being a parent are priceless, following a few tips can make the price tag that comes with it a bit more manageable. To do this, you’ll want to; Take it easy on the baby buys, consider investing in a term life insurance plan, and maximize your health insurance benefits.

Maximizing your health insurance benefits may help with some of the costs, more than a traditional health plan would; With a baby on the way, you need to save money (without hindering quality of care or benefits provided) in every way that you can while getting even better coverage. While making a few baby purchases here and there, especially on those cute little outfits, the total amount of your baby spending can increase rapidly. While you should never forgo quality for a lower price, you shouldn’t spend hundreds of dollars on things, such as an outfit, that your child may be only able to use for a short period of time; Babies can outgrow clothes in a matter of weeks, spending big bucks on pricey outfits that’s only going to get a few wears is not worth it. This money could be spent better elsewhere, like saving for you child’s education.

In preparation for a child, you should also open them up a trust fund. These kind of accounts remain tax-free until your child turns 18 and then is granted access to the money. Even if you may not have much money to incorporate into the account, that money you save from skipping on pricey clothes and toys adds up; You’ll have 18 years to add funds into your child’s trust fund, so at least they’ll have something when they’re older.