Getting ready to have a baby involves a lot more than doctors’ appointments, birth plans, and setting up the nursery — it also requires new parents to take a careful look at their finances.

While it might be hard to imagine your little one heading off to college when they’re still a bean in your belly, that time will come around sooner than you expect. And in the meantime, you’ll face lots of other new costs along the way, from diapers and daycare to school lunches and field trips.

Raising a child in the United States costs $233,610, according to 2020 data from the U.S. Department of Agriculture.

Even though that figure might initially induce some serious sticker shock, a bit of financial planning can set your family up for success. Here are some tips for budgeting for your baby’s future.

Having or adopting a baby counts as a qualifying life event for making insurance changes outside of open enrollment.

As you’re adjusting your healthcare plan, make sure you understand the terms and deductibles involved so you can select the right option for your growing family.

Consider opening a Health Savings Account (HSA) if you don’t already have one and you meet the qualifications. It’s a special savings account that allows you to put away up to $7,100 in pretax dollars to use for certain medical expenses.

You can spend the money on some pregnancy-related costs, such as:

  • birth classes
  • breast pumps
  • prenatal vitamins

Once your baby arrives, your HSA can cover things like baby sunscreen, thermometers, first aid kits, and medications, ultimately helping you trim your overall healthcare costs.

Understanding your cash flow now is key to covering immediate expenses and planning for the expenses that will arise down the road.

Creating a budget can help you see exactly where your money is going and how much you can afford to spend on any given category. It can also help you accommodate new costs, such as contributions to a college savings account, even if your paycheck hasn’t grown.

The Federal Trade Commission has a handy worksheet you can use to create a budget.

Budgeting apps and software, such as You Need a Budget, Mint, and Goodbudget, can be especially beneficial for busy parents who need a bit of automation and an on-the-go solution for tracking expenses.

It’s hard to think about what would happen to your family if you or your partner passes away unexpectedly. However, planning for the worst-case scenario in the present gives you the opportunity to help your family in the future — and a life insurance policy can help you do just that.

Life insurance pays money to someone named in the policy, such as a spouse or child, in the event that the insured person dies. It offers reassurance that your loved ones have financial protection if you’re no longer around to provide for them.

An emergency fund can give you the cushion you need to weather unplanned expenses, such as car repairs and medical bills, without going into debt. It can also be used to replace your income and keep your family afloat if you unexpectedly lose your job.

Experts typically recommend stashing away the equivalent of at least 3 to 6 months’ worth of living expenses in your emergency savings.

But if that goal seems too lofty while you’re dealing with the other expenses of having a newborn, put away an amount you can afford, even if it’s just $25 per week.

Creating automatic recurring transfers from your checking account to your savings on payday is one way to make contributions more consistent.

It adds up over time and can offer peace of mind that an unexpected expense or circumstance won’t turn in to a full-blown financial emergency for your family.

Tax time isn’t usually a joyous occasion, but some special exemptions and credits can make a financial challenge on new parents a bit more bearable.

With a new baby, you may be able to take advantage of certain perks, such as:

  • child tax credits
  • earned income tax credit
  • adoption credit
  • medical deductions

Talk to a tax professional to see which tax credits, deductions, and exemptions you’re eligible for. It’s also important to ask about the receipts or other documentation you’ll need to have on hand to qualify for these tax perks.

In 18 years, a 4-year college degree could cost more than $422,000 according to U.S. Department of Education data CollegeCalc analyzed.

Even though your child’s college years might seem far away, the best way to save up for tuition is by starting right now, when time is on your side and you can benefit from compounding interest.

Consider setting up regular contributions to a 529 plan. These special college savings plans allow you to invest money on a tax-free basis. As long as the savings and earnings are used for qualified education expenses, such as college tuition, you usually won’t have to pay any taxes on that money.

It’s important to remember that 529 plans can vary on a state-by-state basis, so check the rules on the 529 plans where you live before enrolling.

It’s easy to get caught up in planning for your baby’s future, but your own savings are just as important.

Continue contributing to your own retirement plan, whether that’s a 401(k), individual retirement account (IRA), or another type of investment account, so you can give that money time to grow before your golden years.

By securing your own financial future, you can help reduce the need for financial support from your child down the road. Your retirement savings are an essential part of making that happen.