Sign On
  • Online Banking
    Sign On Form is Loading

If you're expecting your first child, there's a lot to prepare for. In between deciding on a name and figuring out how to child-proof your home, you might also be wondering how to financially prepare for a baby.

The U.S. Department of Agriculture estimates that it costs $233,610 to raise a child from birth to age 17. If your household income is below $59,200, you can expect to spend between $9,330 and $9,980 during your child's first year. If your household income is between $59,200 and $107,400, then the costs may be closer to $12,350 to $13,900.

Here are the expenses you'll likely encounter during your baby's first year and how to best prepare for them.

Budget for These New Expenses

It's completely normal to worry about being financially ready for this new chapter in your life. But knowing what to expect and taking the steps necessary to prepare can help to alleviate your concerns. Here are some of the new expense categories you should expect to factor into your budget:

  • A higher health insurance premium
  • Diapers, bottles, and formula
  • Clothing
  • Nursery items, such as a crib and a changing table
  • A car seat and a stroller
  • Child care expenses, if applicable

Consider whether you'll be able to cover these extra expenses with only one person working, or if both you and your partner will need to work. Then, adjust as needed by either starting to save up to cover maternity leave, decreasing expenses to make a stay-at-home situation work, or making another arrangement. Whatever you decide, make sure that it's the right decision for you and your family.

Steps to Take to Financially Prepare for a Baby

Now that you know the different categories of expenses you can expect, here's what you can do to financially prepare for them.

One of the most expensive (and hardest to predict) costs you'll encounter is the cost of giving birth. Ask your health insurance company for an estimated cost for labor and delivery. Be sure to ask for a few different scenarios, such as the out-of-pocket cost for a cesarean section versus a natural birth. Look into all of your healthcare plan options to determine which will be the most cost effective and provide the best coverage for your expanded family. If your employer offers it and you'll be spending on child care, look into opening a flexible spending account so that you can save on taxes.

Next, get strategic with your baby registry. Make a list of the items you need and want for your baby. Source as many inexpensive and used items as you can, whether from family, friends, or family or online. Add any remaining items to a baby registry that you can share with people who want to give you gifts.

Remember that the more you prepare now for your baby's arrival, the easier your transition will be once they get here. Take action on the steps above so that you can focus on all of the other aspects of becoming a new parent.

This information and recommendations contained herein is compiled from sources deemed reliable, but is not represented to be accurate or complete. In providing this information, neither KeyBank nor its affiliates are acting as your agent or is offering any tax, accounting, or legal advice.

By selecting any external link on, you will leave the KeyBank website and jump to an unaffiliated third party website that may offer a different privacy policy and level of security. The third party is responsible for website content and system availability. KeyBank does not offer, endorse, recommend, or guarantee any product or service available on that entity's website.

Call Us

1-800-KEY2YOU® (539-2968)

Clients using a TDD/TTY device:

Clients using a relay service:

Schedule an Appointment

Talk to a Branch Manager in your neighborhood.

Schedule an appointment now

Find a Branch or ATM