Can You Afford to Become a Parent?

Use These Tips To Review Your Family Financial Situation

Baby sleeping in crib

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Becoming a parent can be emotionally rewarding but financially draining. According to the U.S. Department of Agriculture (USDA), it costs more than $233,610 to raise a child from birth through age 17. And that doesn't include the thousands of dollars you may spend putting them through college. 

If you considered only the financial implications of becoming a parent, you might end up childless. Fortunately, most people don't base this important decision on financial issues alone. As with any other decision that will impact your financial situation, it's smart to go into it with your eyes wide open and being prepared. The changes that accompany adding a new little member to your family can be stressful, but you can greatly reduce the stress by minimizing the financial factor. 

Planning Financially for a Child 

There are several financial issues to weigh in the balance when planning to become parents, starting with how it may affect your household income. Taking time away from work during and after pregnancy or adoption may require you to rethink your budget completely if your paycheck shrinks. 

Check with your employer and insurance company to learn what's covered. If you're planning to birth your own child, see if you're covered by short-term disability insurance, which covers pregnancy. If you need fertility treatments in order to conceive, learn if there will be out-of-pocket expenses to prepare for. And if you plan to adopt or use a surrogate, you'll need to know if you can take any paid time off to spend with your child.


Families come in all shapes and sizes, and there are a variety of ways to build them. From natural birth and fertility treatments to surrogacy and adoption, explore all of your options. It's important to know the costs associated with each of them.

Even if you don't have disability insurance, your employer may be required to grant you time off under the Family Medical Leave Act (FMLA), but they're not required to pay you during that time. Whether or not you'll receive salary or disability benefits, schedule out your expected income and expenses, and make sure you can make ends meet.

Once you have an idea of how much income you'll have coming in when there's a child in the picture, you can make adjustments to your budget. You should also be thinking ahead long term if you decide to stay home while your partner works. It may be necessary to significantly cut your spending to make a one-income household situation work. 

Review Your Health Care Plan

While you're checking on disability insurance, make sure you know what to expect from your medical insurance coverage. The provisions of your policy will determine how much money you'll end up paying out of your pocket.

Consider deductibles and copays, too. Also, find out how much it will cost to add a dependent to your group medical insurance policy. If both you and your spouse have health insurance available through your employer, look at the terms and costs of both policies. Decide whether it makes more sense financially to have you all covered on one plan or to split the coverage between the two plans.


If your employer offers a flexible spending account (FSA), it would be wise to put some money into it to cover unreimbursed medical costs. A health savings account (HSA) can also be used to pay for certain expenses related to becoming a parent, as well as preventative care services for your child. 

Assess Child Care Costs

Probably the biggest expense you'll incur once you become a parent (excluding a college education) is child care, which is especially expensive for infants. Even when your child is old enough to go to school, you may have after-school care, summer camps, and other related expenses.

Check out day-care providers well in advance of becoming a parent to find one that you feel comfortable with and that you can afford. If you want to be able to deduct your child-care expenses from your taxable income, you'll have to choose a licensed provider because you have to report their Social Security number to the IRS when claiming the deduction.


As soon as you start thinking about becoming a parent, start a savings fund for your child. Put a set amount into the account each pay period to cover unexpected expenses and those expenses you've already factored into your budget. 

Be savvy about shopping and bargain hunt for child equipment and supplies. It's important to buy a good car seat, stroller, and more to ensure your child's safety. But remember, your child will quickly outgrow many of the items you buy, and paying full price is often a waste of money. Talk to friends, check stores that sell used goods, visit yard sales, and more. Your baby will never know the difference.

Think Long Term

Becoming a parent can have an immediate impact on your finances, but you also have to consider the bigger picture. Will being a parent allow you to continue pursuing your other financial goals, such as saving for a comfortable retirement or buying a home if you haven't done that already? If you own a home, would you need to upgrade to something bigger, which might mean a higher mortgage payment? Are you planning a job change that could impact your salary or your health care benefits? 

All of these are important questions to ask before deciding whether becoming a parent is right for you. Talking it over with your partner and examining all the financial angles can help you decide if you're ready to make the leap. 

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. U.S. Department of Agriculture. "The Cost of Raising a Child."

  2. U.S. Department of Labor. "Fact Sheet #28A: Employee Protections Under the Family and Medical Leave Act."

  3. Internal Revenue Service. "Child and Dependent Care Credit."

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