Affording a second child: How to make your budget work

Having kids is anything but cheap. According to Bankrate, families can expect to spend an average of $233,610 raising a child born in 2015 through age 17—and that’s not including the cost of college. Adjusted for inflation, that number jumps to $314,665.34, according to data from the Bureau of Labor Statistics. With high inflation and continuing increases in the costs of raising a child, proper budgeting can help make things easier to manage.

If you’ve had your first child, you understand—from diapers to day care to future extracurricular activities, you know how it all adds up. You’ve already been through budgeting for a new baby, but here are some tips on affording a second child.  

While you may feel like a parenting pro, overlooking tips to prepare financially for a second child could be bad news for your bank account. Fortunately, affording a second child is more than doable with the right planning. If your family is about to expand, consider these budgeting tips for a second child:

1. Think twice about upsizing

When asking yourself, “Can we afford a second child?”, consider whether your current home and car can accommodate your growing family.

Kimberly Palmer, personal finance expert, says sharing bedrooms can be a major money-saver as you’re budgeting for a second child. Sharing might not be an option, however, if a second child would make an already small space feel even more cramped. Running the numbers through a mortgage affordability calculator can give you an idea of how much a bigger home might cost.

Swapping your current car out for something larger may also be on your mind if traveling with kids means doubling up on car seats and stowing a stroller onboard. But upgrading could mean adding an expensive car payment into your budget.

“Parents should first decide how much they can afford to spend on a car,” Palmer says.

Buying used can help stretch your budget when you’re trying to afford a second child—but don’t cut corners on cost if it means sacrificing the safety features you want.

2. Be frugal about baby gear

It’s tempting to go out and buy all-new items for a second baby, but you may want to resist the urge. Palmer’s tips for affording a second child include reusing as much as you can from your first child. That might include clothes, furniture, blankets, and toys.

Being frugal with family expenses can even extend past your own closet.

“If you live in a neighborhood with many children, you’ll often find other families giving away gently used items for free,” Palmer says. You may also want to scope out consignment shops and thrift stores for baby items, as well as online marketplaces and community forums. But as you’re budgeting for a second child, make sure you’re keeping safety first, just as you would if you were buying a used car.

“It’s important to check for recalls on items like strollers and cribs,” Palmer says. “You also want to make sure you have an up-to-date car seat that hasn’t been in any vehicle crashes.”

3. Weigh your childcare options

You may already realize how expensive day care can be for just one child, but that doesn’t mean affording a second child will be impossible.

Michael Gerstman, a chartered financial consultant and CEO of a financial group based in Fort Lauderdale, Florida, says parents should think about the trade-off between both parents working if it means paying more for daycare. If one parent’s income is going solely toward childcare, for example, it could make more sense for that parent to stay at home.

As you’re budgeting for a second child—and considering whether to take a career break—you’ll also want to think about whether taking time away from work to care for kids could make it difficult to get ahead later in your career, Palmer adds.

“If you stay home with your child, then you’re also potentially sacrificing future earnings,” she says.

4. Watch out for sneaky expenses

When you’re budgeting for a second child, there are two major tips that can sometimes be overlooked: grocery and utility costs.

If you’re buying formula or other grocery items for a newborn, that can quickly add to your grocery budget. That grocery budget may continue to grow as your second child transitions to solid food. Having a new baby could also mean bigger utility bills if you’re doing laundry more often or running more air conditioning or heat to accommodate your family spending more time indoors with the little one.

Gerstman recommends using a budgeting app because it can help you plan and track your spending. If possible, start tracking expenses before the baby arrives—even as you’re considering “Can we afford a second child?” You can anticipate how your spending may change once you welcome home baby number two, especially since you’ve already seen how your expenses increased with your first child. Then, compare that estimate to what you’re actually spending after the baby is born to see what may be costing you more (or less) than you thought each month. You can then start reworking your budget to reflect your new reality and help you afford a second child.

5. Prioritize financial goals in your new budget

Most tips related to budgeting for a second child focus on spending, but don’t neglect creating line items for saving in your budget.

“An emergency fund is essential for a family,” Palmer says. “You want to make sure you can cover your bills even in the event of a job loss or unexpected expense.”

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There are numerous reasons you need an emergency fund, particularly as your family is growing. But paying off debt and saving for retirement should also be on your radar. You might even be thinking about starting to save for your children’s college.

Try your best to keep your own future in mind alongside your children’s. While it feels natural to put your children’s needs first, remember that your needs are also your family’s—and taking care of your future means taking care of theirs, too.

The key to affording a second child

Remember, the earlier you begin planning, the easier affording a second child can be.

“Putting money aside when you’re expecting can help offset the sticker shock that comes with a new member of the family,” Palmer says. Plus, the more you plan ahead, the more time you’ll have to create priceless memories with your growing family.

As you’re budgeting for a second child, do you plan to take time off work? If so, don’t forget to save for maternity leave or paternity leave.

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