It’s undeniable—anticipating the birth of your new baby is incredibly exciting! Yet, along with that excitement, most expectant parents also experience a healthy amount of trepidation. What will it be like to rearrange everything in my life around baby? What if having a baby is more expensive than I expected? Am I saving enough and in the right places? Luckily, you can draw from the experience of other couples—and the baby-budget guide we offer here at KCL—to plan out your savings goals far in advance and ensure adequate savings by the time baby arrives.

Setting your personal and baby savings goals

The best place to start when budgeting for baby is with your overall savings goals. Here, you will look at two facets: what you would save as an individual adult, and how that will change "with baby."

Note: Here, you can use the working baby budget you developed in the article, Budgeting for Baby: Building Your Budget as a go-by.

  • Individual savings goals: In terms of your individual financial needs, most financial experts would advise a savings goal of 3-6 months of living expenses in a highly liquid form (such as a savings account).
  • "With baby" savings goals: Now you are planning for your own needs and your new baby's needs. So here, you also need to save sufficient financial resources to take care of the first 3-6 months of your new baby's needs.

Expense variables that impact savings goals

Nationwide estimates of how much baby costs one parent or the next can vary greatly due to a number of savings variables. For instance, if you have excellent insurance benefits and a generous maternity leave policy at work, you may need to save less than another expectant parent who is self-employed and has a high deductible insurance plan.

Here’s a list of common variables to review as you set your savings goals:

  • Your insurance benefits: The more your insurance pays, and the more you know about the details of your policy, the less you may have to pay out of pocket.
  • Your own health and your baby's health: Here, paying very careful attention to your insurance benefits may salvage some of the extra expense associated with poor health or medical complications (example: some insurers pay for special formula due to a baby's allergies, while other insurers do not).
  • Your employer's maternity leave policy: If you are employed and the company offers maternity leave, find out everything you can about the policy in advance.
  • Your income: Maintaining a full-time, two-income household may or may not be realistic at least for the first year or two of your baby's life.
  • Where you live: The community and region of the country you live in can significantly impact how much you spend on care, services and even groceries.
  • Your expertise with bargain and coupon-based shopping: If ever there was a "right time" to become a bargain shopper and KCL couponer in earnest, having a baby on the way is that right time!