Your Baby Is a Toddler! What to Know When You Have a 1-Year-Old

Happy birthday to your baby! Isn’t it hard to believe that you had such a tiny, mewling, mushy creature a year ago, and now you've got a person who can move around, communicate their wishes and show off a unique sense of humor?

You’ve made it a full orbit around the sun as a parent, and you deserve to celebrate. This milestone is an even bigger deal for you than for your baby, who probably has no idea what that birthday candle is for.

So, after your well-earned slice of cake, it’s time to plan for an exciting year ahead. Here’s what you need to know.

1. Recalibrate Your Childcare Budget

With babies, everything—good or bad—is a passing phase, and their changing needs can keep parents’ budgets in flux, too. Childcare costs vary widely depending on your state and whether you go to a daycare or have someone like a nanny (or family member) take care of your child at home. On average, costs for toddlers drop slightly; the definition of “toddler” varies state to state, too, so a price change may kick in at 12, 16, 18 or 24 months.

Don’t assume your daycare fees will automatically decrease, but consider asking about price changes over time and tweak your budgeting plan accordingly.

Another way to offset childcare costs is to claim a childcare tax credit, which offers up to $2,000 per qualifying child per year.

2. Get Ready for Weaning

At a year, babies are ready to shift from formula to dairy milk. Formula can cost about $70-$150 per month, whereas a gallon of milk costs just under $3, so many families will see a drop in grocery costs after weaning off formula. Not to mention, introducing your baby to a wide array of “real” foods is fun!

If you're looking to further optimize your grocery budget, you could consider looking into credit cards with rewards at the grocery store.

3. Make Time for Your ‘Laters’

In that first chaotic year, it’s easy to put off some longer-term tasks. After all, getting a few minutes of shut-eye sometimes just needs to come first. Now that you’ve hit this milestone, though, it’s a good opportunity to revisit those things you’ve marked as “later” and finally check them off your list.

For many people, that includes learning more about what life insurance is and how it works. Seriously—many of our own customers have taken months or even years to finally go from “need it” to “have it.” To avoid falling into that same trap, take a few minutes now to read up. When you’re ready, you can apply for a term life insurance policy through Fabric in ten minutes, online. 

Similarly, lots of new parents put off writing a will because they don’t realize how quick it can be. Full disclosure: Fabric has a solution for that, too. Our online will maker is free, only takes about five minutes and comes with instructions on how to make it legally binding.

4. Reassess Your Toy and Clothing Stash

“My wife and I were fortunate to get a lot of hand-me-downs. We didn’t have to pay for many baby clothes when our baby was born,” says Matt Becker, Certified Financial Planner and founder of Mom and Dad Money. “But as our kids got older, that stopped. You don’t get baby shower gifts anymore!”

Looking for affordable ways to find clothing? If gently used is fine by you, ThredUp, Once Upon a Child and local mom-to-mom Facebook groups can be great resources to score cheap or even free supplies. For new items, shopping in outlets or scanning clearance racks for off-season clothing can cut prices.

5. College Check-In

One rule of thumb is to save about $2,000 per year if you aim to cover half of your child’s tuition at a public university.

Haven’t started saving yet? Don’t beat yourself up. Becker’s ebook, The New Family Financial Road Map, recommends stabilizing your basic needs, purchasing life, disability and health insurance, and taking full advantage of any employer match for your retirement contributions before you think about college savings. There’s no way to know for sure what college costs will be in almost two decades, or if your child will even want to go straight to college at all.

If you haven’t already opened a college savings account, that’s one place to start—and you can jump in with just a small amount. Try a college savings calculator to figure out how much might make sense for you to start saving. Even if you’re not ready for regular contributions, you could encourage grandparents or other relatives and friends to offer a contribution as a birthday or holiday gift.

6. Planning for Retirement

Speaking of retirement, when’s the last time you made sure your future is on track? You’ve probably been (understandably) busy in the trenches of babyhood, but now that you’re hopefully sleeping through the night from time to time, you may have a moment to devote to more adult topics.

Rule of thumb? Aim to save the equivalent of your annual salary by age 30, and double your salary by 35. That said, stats on real families show median household retirement savings of $12,300 for people under 35, and $37,000 for people aged 35 to 44. In short, if you’re struggling to save for retirement, you’re in the majority.

This year, choose at least one strategy to boost your retirement savings:

Meet your employers 401(k) match. This common workplace benefit is as close to free money as many of us will ever get! Take full advantage of it.

• Increase your 401(k) contributions by another 1 to 2 percent. Small increases are less likely to rock the boat on your budget, yet a little retirement tweak each month can make a big financial difference over the decades.

• Open an IRA. Workers in the gig economy, or stay-at-home parents, may not have access to a 401(k), but they can still save a retirement nest egg with other types of retirement accounts, like IRAs.

• Dedicate your tax refund to retirement. If you receive money that’s not earmarked for your daily living budget, you’ve got a great opportunity to pad your savings without making day-to-day sacrifices.

• Cut one expense. Now that your baby’s weaned, rerouting even half of the money you’d otherwise spend on formula to retirement can add up to hundreds of dollars by the end of the year.

7. Glimpse What’s Ahead

Your baby is acting more and more like a little person. They're more captivated than ever by the world around them, and eager to share that curiosity with you. Some of the developments around the corner for your family include:

• Skills: Walking turns to running before you know it! Stair climbing, climbing on furniture and trying to throw or kick a ball keeps baby (and you!) busy.

• Mealtime: More motor control means learning to use a cup, fork and spoon. Don’t worry too much about picky eating. Babies often need to see foods multiple times before they’ll try something new.

• Communication: Around 17 to 18 months, many parents notice their babies experience a language explosion. It’s a huge relief to hear your baby change from incoherent wailing to requesting, “Cheese. Ball. Juice.”

• Playtime: At age 1, babies are into more interactive, imaginative play. Handing you toys is a fun game. Your little one may even start modeling your activities by rocking or feeding a favorite toy.

One preview of toddlerhood is also on the way. Tantrums aren’t fun for you or your baby, but the more you can keep calm, the shorter a tantrum often lasts. The AAP recommends against spanking as discipline, and suggests redirecting kids instead. At a year old, little tantrum-throwers are often easy to distract with a new setting or different toy.

It’s incredible to think that your child’s babyhood is coming to a close, so enjoy some snuggles as you look toward the transition to toddlerhood ahead!

Ready to jump ahead? Find out what you should know when your kid turns 2. Or check out our tips for your kid at every age.

Fabric exists to help young families master their money. Our articles abide by strict editorial standards.

Fabric by Gerber Life exists to help young families master their money. Our articles abide by strict editorial standards.

Information provided is general and educational in nature and is not intended to be, and should not be construed as, financial, legal, or tax advice. Laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of this information. Federal and state laws and regulations are complex and are subject to change. We make no warranties with regard to the information or results obtained by its use, and disclaim any liability arising out of your use of, or reliance on, the information.

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