How much does it cost to have a baby?

How much does it all cost is the million-dollar question for expecting parents. The answer can vary due to your circumstances.

“Getting ready to have a baby has really taught me that anything and everything can happen,” said Stanton Burns, a CFP and owner of Oakview Wealth Solutions in St. Charles, Mo. Stanton is expecting his first child and said the biggest cost at the beginning is medical bills, especially if there are complications.

Young families who are experiencing other major life events such as getting married or buying a home can find medical bills particularly cumbersome.

“Nobody shared with me the cost of having a baby from pre-pregnancy to afterbirth. That was all very surprising to me for baby No. 1,” said Angela Furubotten-LaRosee, a CFP and founder of Avea Financial Planning. To avoid any surprises, Furubotten-LaRosee, based in Richland, Wash., recommends asking questions and staying informed throughout pregnancy and delivery.

Here’s a breakdown of common costs you should be aware of when having a baby. Insurance may help you cover some of these expenses.

The cost of childbirth

Before-birth costs: There are prenatal appointments, ultrasounds and other health-related expenditures for the mother and child that may come up as they’re needed. In vitro fertilization (IVF) and other fertility treatments may be necessary as well. The average cost of IVF is $12,400 per cycle, according to the American Society for Reproductive Medicine. Beyond health care, there are items such as cribs, car seats and bottles you may need to buy.

Birthing costs: The cost of birthing a child may range from $2,000 to more than $20,000 depending on where you’re giving birth, the type of birth site (birthing center, hospital or somewhere else) and if there are complications during delivery. A 2015 study by the International Federation of Health Plans found the U.S. average for normal deliveries to be $10,808. Healthy pregnancies with normal deliveries generally cost the least amount of money. Cesarean sections with complications can cost more. Some of the cost may be covered by insurance.

Afterbirth costs: After the birth, follow-up appointments, immunizations, formula, diapers and child care costs are ones to factor into your budget. These costs will also vary depending on the health of the mother and baby.

The cost of adoption

Adoptions can cost relatively lower if you adopt from foster care. Expenses may be reimbursed through federal and state adoption assistance services in this scenario. If you opt for a private adoption agency, the cost could range from $20,000 to $45,000. This may include fees for counseling, child care during the transition, legal fees and other expenses for preparation and placement.

The cost of child care

Child care is an expense you should plan for very early, even before delivery, because of the logistics and costs. “Some places have a waiting list [of six months to a year], which is something you need to get ahead of if you plan to send your children to day care,” Burns said. According to the annual Care.com Cost of Care survey, “the average weekly cost for an infant child is $211 for a day care center, $195 for a family care center and $580 for a nanny.”

Start looking for options early to compare costs and secure your child a spot at a place you trust. To help with expenses, you may be able to claim the child and dependent care credit. The tax credit ranged from 20% to 35% of eligible care expenses. You may also be able to take advantage of a dependent care flexible savings account (DCFSA) option, which is an account with tax perks offered by some employers. A tax professional can help you devise a tax plan that’s most beneficial given your household size and income.

Understand how much your insurance will cover

The medical expenses listed above for you and the child may be offset by insurance depending on your health care plan. Reviewing your coverage should be at the top of your priority list.

Know the type of plan you have. Understand what’s covered (prenatal and postnatal) and know how your copays, deductibles and coinsurance work. Your provider may be able to give you a rough estimate of how much birth will cost given your health, delivery plan and medications.

Make appointments with the right doctors. Double-check that the providers you plan to use are covered by your insurance plan. Some plans only cover a specific group of doctors. Other plans allow you to see doctors out of network, but it costs you more.

Know how a high-deductible health plan (HDHP) impacts your wallet. High-deductible plans are ones that offer lower premiums. The trade-off is that you have to pay more before insurance kicks in. “If you end up racking up [medical] expenses, you may be paying a lot more out of pocket than you could have with a traditional plan that has a higher premium and lower deductible,” Burns said.

Burns recommends considering your insurance options before having a baby to see which type of plan will benefit you the most. Look at traditional plans to see if there are potential savings. If you have a HDHP, putting money away for medical bills is something you should also prioritize for out-of-pocket expenses. You can use a health savings account (HSA) to save for medical bills. We’ll talk about the HSA below.

What if you don’t have insurance? You may be able to qualify for health care through the marketplace at HealthCare.gov. Families who earn between 100% and 400% of the federal poverty level may qualify for subsidized costs. You can find out if you qualify here. Families who meet low-income limits may also be eligible for Medicaid and the Children’s Health Insurance Program.

Review your savings options

There are several accounts you can consider to save up for prenatal costs, delivery expenses and other baby needs as they grow. Some of these saving methods even have tax benefits.

Put away cash in an HSA if you have an HDHP. HSA accounts are only for high-deductible insurance plan holders. HSAs are triple tax-exempt, according to Burns. “You can put money into this account tax-free, it can grow tax-deferred and you can take money out of it without paying taxes either,” Burns said.

Your account must be used for qualifying medical related expenses such as prescriptions, medical care and dental care. You can carry over a balance in your HSA from year to year. Funds can be used for you, your spouse and dependents. The maximum you can deposit into an HSA for 2018 is $3,450 for individuals and $6,900 for families. Learn more about HSA accounts here.

Save in a medical flexible spending account (FSA). FSAs are accounts typically established by your employer to help pay for medical costs. Money contributed to the account by you or your employer is not taxed. Money from the account is meant to reimburse you for eligible medical expenses. The 2018 contribution limit for the FSA is $2,650 per year. Unlike the HSA, there’s a use-it-or-lose-it policy for the year unless your plan has a grace period or carryover provision. Learn more about the medical FSA here.

Use a DCFSA. The DCFSA is another account offered by some employers where you can put in pretax dollars to cover eligible child care expenses for children younger than 13. Eligible expenses may include before- and after-school care, baby-sitting and nanny expenses, day care and summer camp. If you are married and filing a separate return, you may be able to contribute up to $2,500 per year in this account. The contribution limit is $5,000 per household.

Open up a high-yield savings account. For other savings, a simple high-yield savings account could be the right place to put money away. A regular high-yield savings account doesn’t have the same tax perks, but you can get a higher return on your cash.

“The interest rates of most brick-and-mortar banks that you’ll have in your town aren’t that great. [An interest rate of] less than half a percent is what I’ve seen, but there are some online savings account options that offer higher,” Burns said.

You can check out some of the best online savings accounts here. Account APYs on some of the highest yield savings accounts range from 1.80% to 5.12%.

Make a family leave plan with your employer

Coming up with a family leave plan is another factor to consider when weighing your financial options. You need to know how long your job will allow you to be on leave and how much you’ll get paid.

“[Some employers] say they’ll give you family leave of, let’s say, three months, but they’re only going to pay you for the first three weeks,” Burns said. Having a spouse go unpaid after having a baby can cause financial strain. Adjust your budget beforehand and bump up your savings to make up for any loss in income you may experience.

Save for education costs

Education costs may not be at the top of your mind when you’re waiting for the water to break, but the earlier you plan, the less financial burden you’ll encounter when it’s time for your children to go off to school. “Every dollar saved is one less dollar borrowed,” Furubotten-LaRosee said.

Savings may not cover the entire cost of tuition or college, but at least it’s something. “You could save in a traditional brokerage account. Because it’s long term, you have 18 years to invest in some blend of stocks and bonds that you’re comfortable with,” Furubotten-LaRosee said.

Here are a few accounts to consider:

Uniform Gifts to Minors Act (UGMA) and Uniform Transfers to Minors Act (UTMA)  accounts: The UGMA and UTMA are both custodial accounts you can use to invest money for your child. Accounts may be made up of mutual funds, stocks and bonds. UTMA accounts can also be used for real estate. You can generally contribute up to $15,000 per year per child without worrying about the gift tax. Couples can contribute up to $30,000 per year per child. The child typically gets access to the funds when they’re between 18 and 21, depending on the state where the account is opened. The money doesn’t have to be used just for school.

529 plan: A 529 plan lets you prepay tuition or set up an investment account with tax benefits for education expenses. Depending on your state, the contributions you make into the savings account may be tax deductible. The withdrawals may also be tax-free as long as the money is used for eligible education expenses. Eligible education expenses include tuition, computers and equipment, room and board, and fees. Up to $10,000 per year from a 529 plan may also be used to pay for tuition at a public, private or religious elementary or secondary school.

Each state has different programs, so you should educate yourself on the type of program offered and its tax perks, Furubotten-LaRosee said. Unlike the UGMA and UTMA account, there are penalties if your child doesn’t use the money for school. The child may pay state and federal taxes on the money, plus a tax penalty of 10%.

There’s a lot to think about financially when having a baby. Adding another person to the family is a lifestyle change. Take a look at your spending and budgeting habits to make room for upcoming expenses for the child, and review the options above to make a smooth transition.