Life Insurance
Insurance 101
Live Chat
Sign In
Apply Now
Work, Life, Balanced

How to Prepare for a Baby: 5 Things to Get Ready for the First Year

By Jessica Sillers Feb 11, 2020

Babies change more in their first year of life than at any other time. Your little one will triple her birth weight, learn to crawl or even walk, and say a first word or two.

It’s no wonder that your life goes through major changes, too! Becoming a parent means juggling multiple new financial goals—we’re here to help you find your way. After all, it takes a village.

As you think about how to prepare for a baby (and for all the challenges and joys of your baby’s first year of life), here’s what you need to know:

1. Rebalance Your Budget

One of the biggest new-baby “expenses,” according to Matt Becker, Certified Financial Planner and founder of Mom and Dad Money, isn’t technically an expense at all: If one parent plans to quit working and stay home, you’ll need to have a plan for your new single-income lifestyle.

The best way to prepare for a baby financially, if you can, is to start living off your new single-income budget before the baby arrives. This lets you adjust with some room for error, since you’re still bringing in both partners’ income, plus you can save the stay-at-home-partner’s paychecks to build a nest egg.

If you’re both working and paying for daycare, you’ve still got some budget calculations to do. Childcare can easily cost as much or more than housing, especially if this isn’t your first baby, according to a state-by-state guide.

So where does the money come from? You’ll probably scale back on some entertainment spending (you may want to spend nights in with the new baby, anyway), temporarily reduce retirement contributions or find a cheaper grocery store option.

You can also keep your budget in check by resisting the trap of proving you’re a good parent with a baby gear shopping spree. Your baby needs a car seat, safe sleeping space, milk, diapers and a few outfits. Nursery decor, a dresser, specialty baby carriers and many other items can wait at least a few months if money’s tight.

2. How to Prepare for a Baby: The Finances of Parental Leave

Your top financial priorities will be meeting basic needs (food on the table, lights and heat on), paying at least the minimum on bills to protect your credit and purchasing health insurance for everyone in your family. Once those goals are met, you can work on saving for a rainy day.

If your employer doesn’t offer a paid parental leave policy, you may find yourself dipping into savings to cover costs while one or both parents are home.

Ideally, your emergency fund would be equipped to cover three to six months of living expenses. When planning for a baby financially, shoot for at least $1,000 to $2,000, and preferably more.

“Getting that savings in place will basically stabilize your financial situation, so whatever comes up with car repairs, home repairs, a medical bill, you should be able to handle that from savings without going into debt or making major changes in your daily life,” Becker says.

3. Insure Your Family’s Future

When planning for a baby, you might want to consider term life insurance. If something were to happen to you or your spouse, a life insurance policy could help provide a financial cushion—replacing the income you would’ve contributed to the family, and also covering things like funeral costs, debt repayments and more.

We’re sure you’ll have a healthy pregnancy and birth, but on the off chance that something were to happen at the hospital, life insurance could help make sure that your spouse and baby would be all right financially. Here’s more on how life insurance works and how the life insurance process works when you're pregnant.

Ready to get started. Apply for term life insurance online in minutes with Fabric.

4. Retirement or College?

Paying for childcare, diapers, formula, additional insurance policies, debt payments and emergency savings is already enough to stretch a budget! If you don’t have enough left to fund both your 401(k) and your baby’s 529 plan for college, how do you choose?

Family financial planning sometimes involves putting your own mask on first, Becker recommends. Just like in an airplane emergency, you need to protect yourself in order to care for your child.

“A lot of times, parents feel selfish saving for prioritizing retirement over saving for college, but it’s not a selfish goal at all,” he says. “You have to make sure your own financial situation is secure before helping your child, because if you put all your money into college and don’t save for you, the future burden will fall on them.”

(Is there such a thing as saving too early for college?)

There are lots of ways to pay for college, including scholarships, grants and loans or choosing a school with lower tuition. Your retirement plan, on the other hand, depends on money you save, so it comes first.

5. Watch Your Baby Grow

Many new parents need a reminder to keep an eye on their finances, but no one needs to tell you twice to relish quality time with your baby! Babies go through remarkable changes in their first year. A tiny taste of what’s to come this year:

  • Skills: Head turning, reaching, grasping, scooting, crawling, sitting, standing and walking(!) takes your baby on a journey from tummy time to toddling.

  • Mealtime: For four to six months, all baby needs is milk, whether from mom or a bottle. As the months progress, you can introduce your little one to mashed fruits and veggies and discover new favorite foods together. (Get used to Cheerios in your backseat!)

  • Communication: At first, this means tons of crying, but then babbles, coos and giggles. Will Mama or Dada get the first-word honor? Only time will tell.

  • Playtime: At first, your face is the best toy, with its ability to express love and emotion. Bubbles, balls, pots and pans and your cell phone are strong candidates for favorite toy as the year goes on.

Take tons of pictures, and enjoy bonding as a new family together. Whether this is your first or fifth baby, a new life is always amazing to witness.


Want to find out what comes next? What you need to know when you have a 1-year-old. You can also check out what you need to know for the first ten years of your child's life.

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.

Fabric by Gerber Life offers a mobile experience for people on-the-go who want an easy and fast way to purchase life insurance.


Written by

Jessica Sillers

Related Posts

Work, Life, Balanced

How Spending 13 Minutes a Day on Self-Care Changed My Life

I created the Mental Health and Wealth Challenge to engage in self-care that was meaningful, simple, and free — and only takes 13 minutes a day.

By Melanie Lockert
Work, Life, Balanced

Can You Afford to Become a Stay-at-Home Parent? How to Find Out

Working vs. being a stay-at-home parent is a major decision. We’ve created a framework to provide financial clarity about your best options.

By Julie Pierce Onos
Work, Life, Balanced

How to Make Mundane Moments With Your Kids Feel Actually Special

We asked experts for ways to savor even the mundane time with family—whether or not we’re in the middle of a pandemic.

By Sarah Li Cain

Fabric Picks

Life Insurance

Why Women Need Life Insurance — But Aren’t Getting It

The life insurance gender gap shows that women are less likely to have the coverage they need than men. Explore reasons and ways to close the gap.

By Jessica Sillers
Life Insurance

What It Means to Surrender a Life Insurance Policy—and How to Know If It’s Right for You

If you have a permanent life insurance policy that has a cash value, you might be considering surrendering your policy as a source of cash. That’s a decision that shouldn’t be taken lightly.

By Jacqui Kenyon
Life Insurance

Types of Life Insurance, as Explained by Mom's Favorite TV Shows

Learning about life insurance doesn’t have to be overwhelming. Here’s how our favorite TV shows help us understand the types of life insurance.

By Jessica Sillers
Fabric by Gerber Life Logo

About Fabric

iOS

/

Android

Download Fabric’s iOS mobile app through the Apple App Store
Download Fabric’s android mobile app through the Google Play app store

© 2023 Gerber Life Agency, LLC

Term Life Insurance Policy Series ICC22 2205-4004 WSA and Accelerated Death Benefit Rider policy series ICC22 2205-2623 WSA (and state variations where applicable) issued by Western-Southern Life Assurance Company, Cincinnati, OH which operates in DC and all states except NY, and distributed by Gerber Life Agency, LLC using Fabric Technologies. Gerber Life Agency, LLC is an affiliate of Gerber Life Insurance Company (est. 1967). All are members of Western & Southern Financial Group (Western & Southern). Issuance of coverage for Term Life Insurance is subject to underwriting review and approval. Please see a copy of the policy for the full terms, conditions and exclusions. Product provisions, availability, definitions and benefits may vary by state. Payment of benefits under the life insurance policy is the obligation of, and is guaranteed by, the issuing company. Guarantees are based on the claims-paying ability of the issuer. Products are backed by the full financial strength of the issuing company.

All sample pricing is based on a 30-year old F in Excellent health for the coverage amount shown and a 10-year term policy, unless otherwise stated. Gerber Life Agency, LLC (GLA) is an insurance agency licensed to sell life insurance products. GLA will receive compensation from Western-Southern Life Assurance Company for such sales. The NAIC Company Code for Western-Southern Life Assurance Company is 92622.

Western-Southern Life Assurance Company's A+ Superior A.M. Best Rating: Superior ability to meet ongoing insurance obligations (second highest of 13 ratings; rating held since June 2009). Ratings are subject to change from time to time. The ratings shown here are correct as of 09/03/2022. For more information about a particular rating or rating agency, please visit the website of the relevant agency.

Plan like a parent. is a trademark of Fabric Technologies, Inc.

Gerber Life is a registered trademark. Used under license from Société des Produits Nestlé S.A. and Gerber Products Company.

In the State of California, Gerber Life Agency, LLC is known as and does business as Gerber Life Insurance Agency, LLC.

FBGL_A1_0331