Having a baby? Time to Start an Emergency Fund!

Having a baby is a joyful event. However, expenses for a new baby can become overwhelming if you don’t plan for it.  To make things less stressful, once you know that you are expecting, begin an emergency fund right away.


Along with starting an emergency savings account, develop a spending plan so that you have a structured idea of what to spend on. This will ensure that you don’t fall into the impulse spending trap, and buy items you don’t need.

Here’s a list of some of the baby-related expenses and their costs that you can expect in just the first year:

  • Car seat – Car seats start at $50 to $250. As your baby grows into a toddler and older, you will need to trade out a new seat as he/she grows. An emergency fund can help ease that cost.
  • Stroller – Strollers can cost anywhere from $50 to $1000 depending on the type of stroller and its individual features. You want the safest but most practical stroller possible, so do your research and purchase one within your means.
  • Baby bed/crib – These items can cost anywhere from $50 to $450 depending on size and features. Some models are even adjustable and can be used up to toddler age, so research and find the model that is best for you.
  • Baby clothes and blankets – Babies grow fast, and it’s very possible that you will have to buy new clothes every one to three months, which adds $100-250 to your monthly expenses . Having an emergency fund to help defray those costs will be very helpful when the time comes.
  • Diapers – Diapers cost anywhere from $10 to $20 a week, which adds up to $80/month and up to $900 a year. Diapers are a baby staple you’ll have for at least the first two years. Make sure that you budget accordingly for it.
  • Toys and books – New parents can be especially enthusiastic about buying lots of baby items. Make sure to make a list of baby needs, then create a discretionary expenses spending plan for items you definitely plan to buy, so you don’t go overboard.  
  • Bottles, baby formula and breast feeding pumps – Bottles don’t tend to cost more than $5, however breast pumps can cost anywhere from $30 to $400, depending on the model and function. If you choose not to breast feed, baby formula can cost up to $175 a month.

Future Costs of Raising a Child

As children grow, the costs for raising them will also to grow, which is why an emergency savings is so important. Along with creating a savings account to cover the immediate costs of having a baby, saving for future costs of raising a child is equally important. Some future costs to prepare for include the following:

  • School activities – Grade school costs can vary, and range from $25 three times a year for school trips to $250 for an athletic or required school uniform.
  • Day care/babysitting – Daycare costs have become more expensive over the years, and can cost anywhere from $750 to $1000 or more a month, depending on the facility that you choose.
  • Clothing – Children can grow at rapid speeds, so be prepared for the continued costs of clothing that comes with caring for a child, which can cost you anywhere from $500 to $1000 a year.
  • CollegeEducational costs are continually increasing so it is good to start saving now.  Saving a minimum of $1,000 a year(less than $85 a month) is a good place to start.

Setting up an emergency fund for immediate baby expenses and future school expenses is smart and will give you a nice financial cushion for raising a child with continuous needs. Another course of action you can take to ease your upcoming baby expenses is to look over your current expenses and determine which discretionary expenses you can cut back on or eliminate (eating out, movies, etc.) to save money that could go into your emergency savings.

In addition to opening a savings account with your bank or credit union, another smart financial measure to take would be to begin contributing to one of your TSP allotments. Want even more savings reserve? Invest in savings bonds. If you already have an emergency savings account, double what you currently contribute to it for the next nine months and you’ll have a great source of income for your baby needs.

Resources for Military Parents

  • Armed Forces New Parent Support Programmilitaryonesource.mil provides a search engine by where you can search service branch or location for this program that helps parents develop the skills they need to provide a nurturing environment for children.
  • Zero to Three Military Family Projects - works to increase awareness and collaboration throughout the military community so that parents and professionals can more effectively care for very young children and their families.
  • Specialized Training of Military Parents (STOMP) - a federally funded Parent Training and Information (PTI) Center that assists military families who have children with special education or health needs. It is funded through the U.S. Department of Education.
  • Military Child Education Coalition – this website has links to several parent resources including published journals and Parent to Parent ABC's guide and a checklist for school moves.

Utilize and follow these tips and resources and you will be able to focus on your new bundle of joy, rather than worry about creating a new bundle of debt.  Take your savings plan a step further and take the Military Saves pledge and choose “special event” as your savings goal to receive advice and motivation from Military Saves.

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