Everyone knows that babies cost a lot of money.

The USDA estimated that it costs a family $233,610 to raise a baby from infancy to the age of 17.

That’s a lot of money. But the good news it, it’s spread out over time.

So how much do you need to have saved up before the baby comes home?

That’s a little tricky depending on your own preferences, access to affordable childcare, insurance, gifts, and of course the health of your baby.

But that doesn’t mean you can’t take a pretty educated stab at it.

In a perfect world, you would want to be in peak financial situation before your little financial trainwreck  bundle of joy comes home.

So you’d want to have:

  • All your high interest, credit card debts paid off.
  • 3 months saved take come pay to cover the loss of income during maternity leave
  • At least 6 months emergency fund savings in the bank
  • Your insurance maximum out of pocket – this is the worst-case scenario payment you will have to make with your insurance for covered procedures 
  • 6  months of daycare expenses – it’ll take some time to adjust to the new world (and budget) that is daycare expenses. Giving yourself a 6 months head start will make the transition easier and pretty much guaranteed your lifestyle won’t be significantly impacted.

Ideally, you want to be as close to the above as possible before your baby arrives.

But in the real world, that rarely happens so here is the mock-up for what you should have saved.

  •  Your insurance deductible – this is the amount you are required to pay out before your insurance starts paying for your procedure. You want to have this saved and set aside in a checking/savings account. You won’t need it before the baby arrives, but hospital bills come quickly thereafter, and the last thing you want is to get a $1500 bill when you aren’t working and don’t have anything saved up.
  • Three months’ worth of ANY living expenses that your paycheck covers. If you are in a relationship and your partner’s paycheck can cover these expenses while you are not working then you don’t need to have them pre-saved. But if these are 
  • Three months worth of debt payments to cover your credit card, student loan, car noteetc., any of those debts while you are on maternity leave and not working. You don’t want to fall behind on your debts because you didn’t have adequate income to cover them.
  • At least $1000 emergency fund for unexpected expenses related to the baby.
  • First 3 months of daycare expenses

It’s important to note that assume that all the necessities (a safe place to sleep, car seat, feeding supplies, etc.) have already been purchased.

These details are guidelines, not hard and fast rules. If you will be a stay at home mother, then you would not need to have the first 3 months of daycare expenses, that could be added to an emergency fund.

And if you feel more comfortable with $5000 baby emergency fund then do so.

It all depends on your comfort level.

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