How to afford a second child

Having kids is anything but cheap. Families can expect to spend an average of $322,427 raising a child born in 2015 through age 17—based on data from the U.S. Department of Agriculture, cited on U.S. News. With high inflation and continuing increases in the costs of raising a child, the right budgeting can help make things easier to manage.

If you’ve had your first child, you understand—from diapers to day care to future activities, it all adds up.

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 on how to afford a second child:

When asking yourself, “Can we afford a second child?” consider whether your current home and vehicle are big enough for your growing family.

Kimberly Palmer, a personal finance expert, says sharing bedrooms can be a major money-saver as you’re budgeting for a second child. However, sharing might not be an option 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 keeping 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.

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

Being careful with family expenses can even go 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 check 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’re using a current car seat model with a strong safety record.

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

Michael Gerstman, a chartered financial consultant and CEO of a financial group, says parents should think about the trade-off between both parents working if it means paying more for day care. For example, if one parent’s income is going solely toward childcare, 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.

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

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

If you’re buying formula or other grocery items for a newborn, those costs quickly add up. Your grocery bill may continue to grow as your second child starts eating solid food. 

Having a new baby could also mean higher utility bills. You may find yourself doing more laundry or running the air conditioning or heat more often as your family spends more time at home with your 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. You can figure out in advance how your spending may change once you welcome home baby No. 2, 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 arrives 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.

Most tips related to budgeting for a second child focus on spending, but don’t forget to set aside money in your budget for saving.

“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.”

If you're thinking of building an emergency fund to cover unexpected events, you'll want every dollar to go as far as it can. A 360 Performance Savings account, for example, offers a high rate to help your balance grow.

There are many 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. Taking care of your future means taking care of theirs too.

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.

Keep in mind these budgeting tips for how to afford a second child:

• Reevaluate your biggest expenses. Before upgrading your home or buying a larger vehicle, take a close look at whether your current space and car can comfortably meet your growing family’s needs.

• Make the most of what you already have. Reusing baby gear and avoiding unnecessary purchases can help keep costs manageable without putting your family’s safety at risk. 

• Take care of your future, too. As you plan for your growing family, keep building your emergency fund and saving for retirement so you’re ready for both expected and unexpected expenses.

Ready to start saving for a second child? You can open a 360 Performance Savings account today to grow your savings with a competitive rate.