JANUARY 7, 2026 – The arrival of a new baby can be one of life’s most joyful milestones –and one that brings significant changes.
While it is an exciting time, it also introduces new financial responsibilities and challenges. Proactive planning for the cost of parenthood can ease the transition and help lay a strong foundation for your family’s financial future.
- Reevaluate your budget.
One of the first areas where you may notice a shift is in your monthly expenses. It is essential to reassess and update your budget to reflect these new financial responsibilities.
Begin by tracking your income and expenses, then estimate the additional costs associated with your baby. Remember, you do not have to do this alone. Army Community Service (ACS) Financial Readiness is here to help you navigate this new world: https://www.finra.org/investors/personal-finance/control-spending-calculate-cash-flow.
- Consider key expenses.
Medical Costs: While most pregnancy, birth and post-natal care are typically covered by insurance, there are instances when certain medical expenses are not covered: for example, items like orthopedic devices, foot drop splints, AFOs and cranial orthosis, also known as helmet molding therapy: https://manuals.health.mil/pages/DisplayManualHtmlFile/2021-03-26/AsOf/tp15/C4S18_1.html.
Baby Supplies: The costs associated with a new baby go beyond essentials like diapers, wipes and baby clothes. Car seats, cribs, strollers, bottles, bottle warmers, diaper bags and other related baby items are considered the expenses of necessary gear. Know that the cost can add up quickly.
Childcare: Depending on your work schedule, daycare may not be an option. In such cases, hiring a nanny can be significantly more expensive. If one parent decides to stay at home, it is important to account for the loss of income.
Additionally, many daycares will not accept infants until they are at least 6 weeks old, and there are often limited spots available due to required child-to-staff ratios. For infants, the ratio is one staff for every five babies. For children under the age of two, it is one staff for every six. This can result in long waitlists, so plan ahead: https://childcare.gov/consumer-education/ratios-and-group-sizes.
Emergency Fund: Babies can bring unexpected medical expenses, emergencies and other financial surprises. That’s why an emergency fund – ideally covering at least six months of living expenses – is essential. This financial cushion can help you handle the unexpected without disrupting your overall budget or long-term financial goals.
- Start saving today for future needs.
While it is important to manage immediate costs, it’s equally critical to begin planning for long-term financial needs, such as your child’s education, future medical expenses and your own retirement. Establishing savings and investment accounts now can reduce financial strain later.
Create a dedicated “baby fund” to cover upcoming expenses like extra-curricular activities, education, school clothes, supplies, clubs, spots, musical instruments and more: https://www.teachersupplystore.org/how-much-do-people-usually-spend-on-school-supplies/.
Consider setting up a 529 plan, which is a tax-advantage account specifically for your child’s education. Even modest, consistent contributions can grow significantly over time.
Lastly, don’t lose sight of your own future. Continuing to contribute to your retirement plans – especially through automated deposits and employer matching – must remain a key part of your financial stability as your family grows.
- Track spending and minimize debt.
It is easy to overspend or make unnecessary purchases on baby-related items. However, it is important to stay on track with your spending and budget. Avoid impulse buying and try to pay down existing debt quickly.
Reducing debt before the baby arrives can ease some financial pressure and provide more flexibility in the months to come. Financially preparing for a baby can feel overwhelming but taking it one step at a time helps build a strong foundation for your growing family.
Reevaluate your budget and start saving toward long-term goals. Two sites that can assist with this Military Financial Milestone are MilSpouse Money Mission at https://www.milspousemoneymission.org/new-child-touchpoint/ and Financial Frontline at https://www.financialfrontline.org/soldier/new-child/.
The ACS Financial Readiness Program is here to help military families navigate the baby transition with expert guidance, personalized budget support and resources tailored to your unique needs. Don’t wait! Reach out today and take the first step toward a secure financial future for your growing family.
We can assist in addressing financial concerns, build stability and improve the chances of retaining security clearances. Call today 502-624-5989/8391 to develop your personal plan.
By Tere Kangas
Army Community Service Financial Readiness