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LIFE GUIDANCE: PREPARING FOR PARENTING

Is your wallet ready to support a family?
Family of two kids two parents sitting on a couch watching a movie together

Parenting pro tip: Plan, plan, plan.

Babies may be adorable, but they're more expensive than you might expect. According to an ongoing study by the USDA, the average household can expect to spend nearly a quarter of a million dollars to raise a child1 – $20,000 to $50,000 of that in the first year alone.2 Here are a few tips to welcome your new addition on a solid financial footing.

Create a budget for baby

This handy calculator from babycenter.com can help you get a better handle on how much you might need.

Check your credit report

You should check your report annually – but especially now to make sure there aren't any surprises before upsizing your home or vehicle.

Reduce credit card debt

If you have a high-rate credit card, look at paying it off or transferring balances to one with a lower rate. The savings will help with expenses.

Get insurance coverage

Once your responsibilities expand with a family, it's even more important to protect your finances against death or disability.

Build an emergency fund

Parenting is full of the unexpected. Experts suggest having at least three months' living expenses on-hand; six months' if one parent plans to leave the workforce.

Prepare for child care

Do your research and get on waiting lists early, so you get a top choice. See if your employer offers an FSA you can use to pay for care with pre-tax dollars. 

1. USDA.gov, "The Cost of Raising a Child." 2017 Report.
2. Harris poll commissioned by NerdWallet, cited in "Study: Would-Be Parents Unprepared for Potential Cost of Raising a Baby." 2017.