For those who hope to start a family, the costs and financial responsibilities of parenthood can be daunting. New parents often face higher medical expenses, child care costs, increased insurance needs and other financial obligations.
It may help explain why Americans are increasingly delaying or forgoing having children. The provisional number of births in the United States in 2025 was 3.6 million, a decrease of 1% from 2024. Before that, births declined by an average of 2% per year from 2015 through 2020.
While you may never fully feel financially ready to have a baby, you can enter this new phase of life with greater confidence by preparing in advance. Here are some of the key items that should be on your baby financial checklist.
[READ: How to Know if the 50/30/20 Budget Will Work for You]
You’ve Integrated Child-Related Expenses Into Your Budget — and Created a Financial Cushion
The cost of having a baby in 2026 can vary depending on where you live and the lifestyle choices you make. Regardless of your situation, it can be helpful to add estimated child-related costs to your current budget and set aside that money to build a small financial cushion before your baby arrives.
Using the last available data from the USDA Expenditures on Children by Families Report (released in 2017), the cost of raising a child born in 2015 through age 18 averaged $233,610. Adjusted for inflation, that cost jumps to $334,984 as of May 2026, based on data from the U.S. Bureau of Labor Statistics.
Living on a tighter budget may require some sacrifices. At a minimum, experts recommend that couples planning to start a family create a plan to pay down debt and save at least three to six months’ worth of expenses in an emergency fund.
You Have Made a Plan for Child Care Costs
Child care will likely be a family’s biggest expense during the first three to four years of a child’s life.
Start by considering whether you have support from family members, whether you and your partner can work staggered schedules and how many hours of paid care you may need.
“Family budgets are tight, and that’s especially true for parents and families that have young children,” Anne Hedgepeth, senior vice president of policy and research at Child Care Aware of America, says. “Part of what’s driving that is child care. It’s one of the most expensive, but also one of the most necessary expenses a family faces.”
The average annual cost of child care was $13,184 nationally in 2025, according to a report by Child Care Aware of America. The organization’s data also shows that center-based infant care costs more than in-state public college tuition in 38 states.
Costs can vary significantly depending on where you live. In California, for example, the average annual cost of center-based infant care was $17,301, while in Arkansas it was $9,727.
Partnering with community organizations across the country, Child Care Aware America offers a search tool on its website to help parents find child care and identify available financial assistance. “There are people out there to help you navigate the system,” Hedgepeth says.
[Read: How to Make a Budget — and Stick to It.]
You Reviewed Employer Policies … and Your State’s Leave Laws
The United States is one of only a few United Nations member countries that does not require paid parental leave by law.
Still, many employers offer paid leave for primary caregivers, and some also provide paid leave for secondary caregivers that families can use during the first weeks and months of a child’s life.
“Make sure to explore your company’s benefits such as paid time off, paternity/maternity leave programs,” Brian Eder, managing partner and wealth advisor with OnePoint BFG Wealth Partners in Minneapolis, wrote in an email.
He also recommended becoming familiar with your state’s leave laws. For example, Minnesota implemented a paid family and medical leave program beginning Jan. 1, 2026, that can provide up to 20 weeks of combined leave benefits.
“Certain forms of disability insurance also allow for supplementing income during leave,” Eder wrote.
You’ve Evaluated Adequate Insurance Coverage
Couples need to budget not just for the hospital costs associated with having a baby, but also regular prenatal visits and pediatrician visits.
New parents should also consider life insurance and disability insurance to help protect their family’s financial security in the event of an unexpected illness, injury or death.
How Much Does It Cost to Have a Child?
According to Eder, labor and delivery hospital costs typically range from $15,000 to $20,000, although costs can vary depending on a family’s health insurance coverage and whether complications arise.
“With health insurance, out-of-pocket costs can range from $2,500 to $3,500 on average,” he wrote.
As a result, experts recommend reviewing health insurance options — particularly if a couple can choose between employer-sponsored family plans — to help minimize future costs.
[READ: 7 Household Staples and Their Inflation-Friendly Swaps]
You Can Balance Long-Term Savings Goals
Many couples must balance goals such as buying a home and saving for retirement with the costs of starting a family. A budget can help support those priorities while also making room for new goals, such as saving for a child’s education.
“If you plan to pay for your child’s education, consider starting a college savings account, such as a 529 plan, to help prepare for the cost of tuition and other education-related expenses,” Eder wrote. “The earlier you start, the better.”
Parents whose children are born before Dec. 31, 2028, may also be eligible to open a Trump Account, a tax-advantaged investment account created through the One Big Beautiful Bill Act. Eligible newborns can receive a one-time government contribution of $1,000.
Every family’s financial goals are different, but covering the basics and creating a budget early can help parents manage the costs associated with this major life transition.
“The best time to prepare, save money, get proper insurance and write a will is in the months leading up to welcoming your new child,” Eder wrote. “You will never have as much time to complete these important tasks as you do before your new baby arrives home.”
More from U.S. News
The Cost of Adoption — and Strategies to Pay for It
Budgeting Tips for New Parents
5 Signs You’re Financially Ready to Have a Baby originally appeared on usnews.com
Update 06/25/26: This story was published at an earlier date and has been updated with new information.
