Welcoming a Child

Small Child, Big Decisions: What to Plan Beyond the Little Things

From arranging child care to saving for the college years, there are plenty of things to consider when preparing for a new baby.

When financially preparing for life with a baby, there are classes available to take, but they may not cover everything. You know your world is about to change in big ways and you need to get your ducks in a row, but what does that entail? We’ve broken down some of the different expenses for you to consider, and how much to budget on average, before your bundle of joy arrives.

The cost of raising your baby can sneak up on you quickly. For example, early on, you’re focused on diapers and formula, but you’ll also want to be thinking about longer-term costs, such as saving for college tuition. Childcare for your newborn and life insurance for yourselves are also items consider, as are out-of-pocket healthcare costs.

In addition to your existing expenses, you’ll also need to consider whether the room you have for your baby is adequate or if you anticipate needing more room when your baby arrives. Then there are the smaller, obvious expenses like a crib, baby food, strollers, car seats and more.

If you and your partner both plan to return to work, childcare is also a budgetary priority. Whether that means daycare, a babysitter or a nanny is up to you, and each comes with a vastly different price tag for you to assess.

While preparing for your first baby can be overwhelming, remember that a little planning goes a long way. One of the most important items on your baby to-do list should be to review your family finance plans and start budgeting for a baby.

Small Child, Big Decisions: What to Plan Beyond the Little Things

Here are some of the most significant matters, such as child care, education and life insurance, that you should prepare for when getting ready for your little one.


Plan for some of these common first-year expenses as you budget for your newborn. As you take on these costs, a great way to help financially protect your family is by purchasing life insurance.

Potential cost of baby’s first year for a family with $200,000 annual income: $51,9851
$26,870 Child care
$6,368 Miscellaneous (diapers, clothes, toys, stroller, etc.)
$5,783 College savings
$4,690 Housing
$3,344 Transportation
$2,071 Food
$1,490 Health insurance
$762 Life insurance for two parents
$607 Healthcare (out-of-pocket costs)


Budget for and confirm your plans for who will be your child’s daytime caregiver from infancy through pre-K.
Average cost of full-time care per month2
Relative: $0
parent*: $0
Preschool: $736
Daycare center: $972
Nanny: $2,600

*Income may drop if parent was previously employed


While college may be many years away, it’s never too early to start saving.
Average cost of yearly college tuition3:
Public two-year (in-district): $3,440
Public four-year (in-state): $9,410
Public four-year (out-of-state): $23,890
Private four-year: $32,410

You’d do anything to help protect your loved ones, but do you know how to best financially protect your newborn?

70 percent of Americans said that “help[ing] to provide for my children” was one of the top three reasons they purchased life insurance.4 Now is the perfect time to look into getting life insurance or review your current coverage to ensure you have enough to help financially protect the dreams you have for your new addition.


1 Study: Would-Be Parents Unprepared for Potential Cost of Raising a Baby, NerdWallet, 2017.
2 Childcare Options: Pros, Cons, and Costs, BabyCenter, 2018.
3 College Costs: FAQs, CollegeBoard, 2017.
4 2016 Amica Life Financial Peace of Mind Survey, 2016.

ALIC51419 (exp. 10/20)

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