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Indiana Securities Division

Securities Division > Indiana MoneyWise > News You Can Use > Money Clip Tips - Baby Proof Your Wallet Money Clip Tips - Baby Proof Your Wallet

Originally published May 2012

Preparing for parenthood is an exciting, not to mention a nerve-wracking, adventure.  While you are thinking about baby names and what color to paint the nursery, you might also want to take a look at your finances, because babies are expensive and worrying about money is the last thing you will want to do when the baby arrives.  The average cost to have a baby in a hospital is $15,000 and to raise that child to the age of 18 (not including college) is $226,920. 

There are a few things that are important to consider either before you are expecting or soon after you find out.  First, you will need a budget.  While you are expecting remember to include prenatal care and maternity clothes, try to also budget for hospital costs as well as unpaid leave from work.  If you do not have medical insurance, make sure to talk to your hospital about getting a discount, most will negotiate the fees with you and create payment plans within your budget.  Start an emergency savings fund now.  Ideally you need about 3-6 months salary in your emergency savings fund.  A good way to start saving is to pay down your high interest debts first; all the extra money you save by not paying the interest each month will build your emergency savings fund up quickly.  Also, start thinking about the things you really need for the baby.  There is a lot of stuff out there that you may be tempted to buy, but in reality will never use.  If you get sucked into the frivolous baby stuff trap, you will definitely overspend. 

You will also want to get your paperwork in order.  Having a child is a huge responsibility, so make sure to get life insurance and write a will, prior to your baby being born.  There are lots of options out there for life insurance, but a good rule of thumb is to get five years worth of your annual salary.  Make sure the person that you buy life insurance from is licensed to sell it in the State of Indiana by going to  Although it is not a fun task to write your will, it needs to be done.  If you do not appoint someone to be the legal guardian of your child, the state will. 

Once you think your finances are in order for the new baby, you might want to start thinking about your child’s financial future.  The average cost for a four year public university in 18 years is estimated to be $95,000. Needless to say, it is a good idea to start saving for college as early as possible.  A great option is a 529 college savings account; which allows you to deduct pretax from your Indiana income when deposited directly into the 529 account.  For more information, visit  However, do not forgo saving for your own retirement to save for college; there are other options to pay for college including scholarships, loans and grants, there are not any other options when it comes to your retirement funds. 

After the baby is born, there are a thousand different things to think about and money will not be on the top of that list.  Start your financial planning now, so that you can enjoy your family when it comes time.