The Most Important Things to Consider as a New Parent

7 min read

Written by Chris Muller

Chris Muller

Chris Muller is a professional personal finance writer who has written for some of the largest financial publications in the world. Chris brings a BBA and MBA in Finance, along with a decade of exp

No one said being a new parent was easy. It takes a lot of patience, effort, and money. Along with all the soft sweetness and cuddles comes a laundry list of life changes, adjustments, and logistical issues to manage.

Taking the time to create a well-thought-out plan can make all the difference when it comes to welcoming your newborn child into the world. You’d have a multitude of things to think about from giving birth safely and the right life insurance. Here are six things to consider as a new parent:


1.    Diapers and Wipes


If you think your newborn poops and pees like an adult, you’re in for a rude awakening. The first year of parenthood can be demanding, especially on your wallet. Brace yourself to become a diaper-changing pro within a matter of weeks.


A month-old baby makes three to four bowel movements per day on top of peeing six or so times. That means you can expect to change up to 10 diapers a day—that’s 320 diapers in the first month! Fortunately, that number will dip in the coming months.


After your baby’s first month, you’ll have to change 8 diapers a day or 240 diapers a month. Check every one to three hours to see if they soiled themselves. According to the National Diaper Bank Network, diapers cost around $900 for the first year, while wipes cost around $120 to $550.  


2.    Baby Care Products


Your baby will need the occasional sink-based bath. If you want your kid to smell like roses, you’ll need a handful of baby care products. You can find most of these essential supplies at your local pharmacy or mart-type store.


These include:


                    Baby brush

                    Baby conditioner

                    Baby nail clippers

                    Baby shampoo

                    Baby thermometer

                    Baby towels

                    Baby wash

                    Baby washcloth

                    Cotton balls

                    Infant Q-tips

                    Petroleum jelly

                    Rubbing alcohol


While it’s tempting to use adult products, it’s safer to buy soaps, shampoos, and other items optimized for your baby’s health. For instance, extra-mild soap reduces the chance of irritation. Take the same precaution for any products related to hygiene.


3.    Transportation


During the advent of the automobile, babies used to sit in their mothers’ laps. Now, federal law requires them to sit in a cushy and protective car seat. While the specific car seat requirements vary by state, prepare to pay $100 to $400 to retrofit your car.


Trips don’t start and end in the car, however. You’ll need a heavy-duty stroller or a baby carrier when you travel by foot. You can save money by purchasing these products online or from friends and family. Double-check the manufacturing date on the equipment to ensure that it’s up-to-date and safe for your baby, meeting the most current codes.


4.    Baby Food


The USDA studies suggest that parents spend $20,000 to $50,000 on newborns each year. A sizable chunk of those expenses is food-related. The final annual bill will depend on the cost of living in your city and what food you give your baby.


Your newborn will need breastmilk or formula for the first year. Breastmilk is, well, kind of free (nursing moms need to eat a lot of healthy food though). Powdered formulas cost roughly $50 per month, while name-brand options cost 2 to 3 times that. Ready-to-feed cans are pricier at $100 to $300 per month, but offer the benefits of bulk and convenience.


You can introduce solid food into the diet as early as six months. Your decision should account for your child’s developmental level, such as the ability to sit without support and maintain proper motor control. Start with easy-to-chew food like fortified cereals, yogurt, and fruit before graduating to more adventurous eats.


The last thing you want is to create a choking hazard. Mash or puree the food until smooth, making sure to remove pits, seeds, and bones. Encourage your child to eat slowly and in small bites.


5.    Feeding Equipment


Breastfeeding is cheaper than formula, but it isn’t free. You’ll still need some necessities, such as nipple cream and infant support pillows. Most new parents spend a few hundred dollars on feeding equipment during the first year of parenthood.


Most women, unfortunately, opt for formula over breastfeeding, in spite of the health effects of a mother’s milk on the baby. Part of the reason is that federal law doesn’t allow women to take more than three months of maternity leave without a pay cut. This limited period makes it challenging and inconvenient to breastfeed. According to ABC News, 65% of American women use formula, which can cost $1,200 to $1,500 per year.


Some expenses associated with breastfeeding or formula include:


                    Baby formula

                    Bottles in various sizes

                    Breast pump

                    Milk collection bottle


                    Nursing bra

                    Nursing pad

                    Travel formula container


Buying in bulk allows you to save money on these expenses. Note that you can buy baby formula in powdered form, but it only stays fresh for up to 48 hours after preparation. If the formula stays at room temperature for more than an hour, be sure to dispose of it.


6.    Your Finances


Save For College

One day, we’ll live in a utopia where automation will take care of all our needs. Until then, your children will likely need to go to college and learn what they’ll need to get a job. While higher education doesn’t seem like a pressing issue as a new parent, you and your wallet are better off creating a college savings plan while your baby is still in diapers.

new parents 

The key here is compound interest which Albert Einstein described as the eighth wonder of the world. It’s interest on a principal deposit, also known as interest on interest. Investing early in your child’s life allows you to reap the full benefits of compound interest.


Consider this example from If you deposited $25 per month in a college savings plan for 5 years, you’d have $1,862 with interest. If you did the same thing for 18 years, you would have $8,967. Put another way, the 5-year option helps you save $31 per month (principal plus interest), while the 18-year one saves $41 per month (principal plus interest).


Saving for a long time is only half of the equation. You should also put away as much money as possible. Doubling your monthly contribution won’t just double your ultimate savings. You would earn hundreds, if not thousands, more in interest. 


Ready to start a college savings plan? Check out your state’s 529 Plan. The investment account provides a tax-free way to save for college at more than 6,000 qualified U.S. institutions. They work similarly to a Roth 401(k) or Roth IRA, allowing you to make deposits into mutual funds or other investments with after-tax earnings.


Rethink Your Tax Breaks


The U.S. tax code has several provisions that remove some of the financial strain on new parents. The Child Tax Credit provides a refundable tax credit up to $2,000 for each child under 17. If the credit exceeds the taxes you owe, you can still earn $1,400 per child.


You can also get a tax break if you hire someone to look after your kid. The Child and Dependent Care Credit lets you write off 35% of child-care expenses. To qualify, the child must be under 13, and the total costs cannot exceed $3,000.


You’ll also have to change your filing status to head of household. The bracket offers the largest standard deduction and most tax breaks. You need to pay, at least, half the cost of providing for the household to qualify.


Prepare for a Rainy Day


Welcoming a child into the world should be a prerequisite for rethinking your rainy-day fund. Your savings account braces you and your family for the worst scenario. If you lose your job or suffer a debilitating injury, the fund provides a financial cushion for the foreseeable future.


Most financial experts, including billionaire Mark Cuban, recommend saving six months of income in your bank account. In an interview with, he said, “I know it doesn’t earn much in the bank, but you’ll sleep a lot better.” Hopefully, you’ll never have to use it, but if something unexpected happens, you’ll be covered.


Take advantage of your bank’s savings plans, like Keep the Change at Bank of America. It rounds up every purchase on your debit cards and transfers the spare change in your savings account. For instance, every time you buy a $2.40 coffee, Bank of America rounds it up to $3.00, and puts $0.60 in your savings.


Reevaluate Your Health and Life Insurance


Health insurance will make up an increasingly large part of your expenses each month. That’s on top of the medical bills associated with labor and delivery. You’ll also have to account for medication, vaccines, and laboratory tests.


Run projections with your current insurance provider and consider increasing your coverage. The higher premium might help you save money with a new child. You might even pay less by adding a dependent.


Life insurance may also seem unnecessary to you if you’re a young parent or couple just starting out. However, life insurance is more important now than ever as you have a dependent who’ll need financial security if something should happen to you. The right life insurance policy can give you and your family great peace of mind.


The Bottom Line


Parenting is one of the most rewarding experiences, but it’s also tough. Everyone loves to warn expecting parents about the challenges, but the advice won’t seem real until the child arrives. You’ll encounter sacrifices and fatigue along the way, but in the end, parenthood can be fulfilling.


Making a plan can help ease your transition into the role as a full-time provider. Our list of things to consider as a new parent provides the groundwork you need to succeed now and in the future. That way, you can get the most out of your newfound relationship.

Chris Muller, Professional Personal Finance Writer

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