Baby budgets

It’s a lot of money: $226,910, to be exact. 

That’s the estimate for how much a middle income family will spend raising a child in the first 17 years. Add college into the equation, and the sum becomes downright terrifying.

It’s no wonder that birth rates ebb and flow with economic concerns. Latest data show births in the U.S. have declined since 2007—the year before the economic downturn settled in. In 2007, 4.3 million babies were born in the United States. Preliminary numbers show just a hair over 4 million babies came into this world in 2010.

Minnesota is experiencing the same trend, with births declining just over 7 percent from the 2007 peak of 73,675 to 68,407 in 2010. The largest declines came from women who didn’t go to college and mothers ages 20 to 24.

Women with advanced degrees actually had more babies in 2010. That could be because women with more degrees have more stable, well-paying jobs. Or maybe these women delayed having a family to continue school and can’t wait any longer to start a family.

Trends aside, babies are born in good times and bad. It’s better to plan financially for your new arrival than it is to bury your head in a baby name book and hope it all works out.

Here are eight money must-dos 
to prepare for baby:

1. Sign up for Baby Boot Camp., a personal finance website for moms, has a free “Baby on Board Bootcamp” that features 10 emails full of to-dos and tips for moms-to-be. Go to 

2. Mock up a first year baby budget.
Don’t fixate on that $226,910 faint inducing sum. Focus on baby’s first year. Consider daycare, diapers, gear, and other supplies, and how they will fit into your budget. 

3. Master your benefits.
From maternity leave to health care, it’s time to get cozy with your company benefits packets. Understand the out-of-pocket costs for having the baby, what paperwork you need to complete to make sure your short-term disability kicks in, and where you can breast pump when you return to work.

4. Explore working versus staying at home.
Maybe you’re hoping to go from two incomes to one, or one-and-a-half once baby arrives. Mock up a budget based on your ideal post-baby work scenario and try it out for a few months, if possible. So if you want to stop working, start living on your partner’s income and save yours. How does it feel?

5. Don’t get caught up in the baby industry.
By that I mean the stuff-for-baby industry. From knee pads for new crawlers to video baby monitors, there are a lot of unnecessary and costly gadgets to overwhelm a parent-to-be. This is where your friends and family that procreated before you come in. Ask them for common sense advice on what baby gear you really need. Odds are they might even have an old baby swing or playpen that they’ve been dying to pass along.

6. Polish that crystal ball.
It’s hard to know what the future will bring. But given the uncertain economy, be safe. Think of worst case scenarios with employment and make sure to save enough money so you can survive at least six months without a job.

7. Don’t fixate on that quarter-of-a-million figure from the United States Department of Agriculture. 
It’s a very general number that can’t reflect the unique family circumstances we all have. If you’re morbidly curious, have some fun with the department’s Cost of Raising a Child Calculator ( And then tuck that frightening figure away.

8. Protect your growing family. 
Scraping the money together to buy life insurance or write a will isn’t easy. I admit our will was never updated to reflect our third baby, who is almost three. But that’s not an excuse for you! Term life insurance is pretty cheap and can be researched online at sites such as Willmaker, a do-it-yourself will making software can suffice if your situation is straightforward and you absolutely can’t afford a lawyer. Spending money on a will and life insurance will help you sleep at night. 

Believe me, you’re going to need the sleep!

Kara McGuire is a personal finance writer and a St. Paul mother 
of three. Send comments, questions and story ideas to 
[email protected].

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