Welcoming a new baby into your family is exciting. But it’s also a little daunting, especially when it comes to finances, considering the fact that the financial pressure of raising kids has been rising fast. A recent analysis found that since 2023, the annual cost of raising a young child jumped by nearly 36%, reaching about $30,000 per year – that’s almost $300,000 by the time they turn 18.[1] In other words, raising children is pricey (and getting more expensive). The good news? With some planning and smart moves, you can welcome your little one with financial confidence rather than stress. Let’s break down a firefighter-specific guide to financial planning for your growing family.
Budgeting for Baby’s First Year
Nothing flips your world upside down like a newborn (in the best way, of course). But it also comes with a whole new category of expenses.Â
Hospital and Medical BillsÂ
Even if you have good health insurance through the department or union, childbirth can be pricey. The average health care costs associated with pregnancy and delivery run nearly $19,000 in total, including about $2,854 that parents pay out-of-pocket on average.[2] Depending on your insurance, you might be responsible for deductibles or co-pays for prenatal care, the delivery, and the baby’s hospital stay. Plan to review what your insurance covers and set aside a cushion for medical bills (e.g., if your deductible is $2,000, make sure you have at least that saved).
One-Time Gear PurchasesÂ
Setting up a safe and comfortable environment for your baby has some upfront costs. Big-ticket items include a crib, a reliable car seat, a stroller, and other gear like a baby monitor and a high chair. You can easily spend a few thousand dollars if you buy all new top-of-the-line gear. For example, premium strollers alone can cost $500–$1,000 or more.[3]
Recurring Expenses Â
Many costs will be ongoing throughout the first year (and beyond). Diapers are a classic example, adding up to roughly $936 on disposable diapers in the first year.[4] Add in wipes, formula (if you’re not breastfeeding), and later on baby food, and you’re looking at a significant monthly bill for basic needs.Â
Additionally, formula can cost $400–$800 per month if your baby is exclusively formula-fed.[5] Baby clothes are another frequent expense (those tiny uniforms only fit for a couple of months!).
Childcare – The Big OneÂ
If both parents are going to be working, childcare could become one of your largest expenses. Starting around the end of any parental leave, you might need to pay for daycare or a babysitter while you’re on duty. Childcare costs vary by location and type, but on average in the U.S., a daycare center for an infant can run about $1,200+ per month, and hiring a nanny can soar to $3,000+ per month.[5]
Even part-time or home daycare options often cost around $1,000 a month for one baby.[5] It’s no small chunk of change. In fact, childcare often rivals a mortgage payment. Firefighters often work 24-hour shifts, which can make childcare tricky since your schedule isn’t the standard 9-to-5.Â
Childcare Totals in the First Year
So, what does the total first-year cost look like? It can vary a lot. Estimates for a middle-income family range from around $17,000 on the low end to $25,000+ for the first year, depending on your lifestyle and location.[6] In high-cost areas or if you have hefty childcare bills, the first-year baby costs could approach $28,000 (or even more).[6] It’s a wide range because every family’s situation is different.
Baby's First Year Calculator
Estimate your firefighter family's first-year baby costs
Medical & Hospital Costs
Baby Gear & Supplies
Feeding Costs
Childcare
Clothing & Miscellaneous
Estimated First Year Total
This estimate can help you plan and budget for your growing family
Pro Tip: Try to pre-load some of these costs into your budget before your baby arrives. For example, if you expect to spend an extra $1,000 a month on baby expenses after birth, start living on $1,000 less per month now and put that money into savings. That serves two purposes: you adjust your lifestyle gradually, and you build a baby fund. By the time the baby’s here, you might have a few months of expenses saved, and you’re already used to the leaner budget.
Leverage Your Benefits and Tax Breaks
Being a firefighter comes with some unique benefits, so make sure you’re taking full advantage of any that can help with the costs of a growing family. Additionally, the government offers tax breaks for parents that can significantly offset some expenses if you plan wisely.
Dependent Care FSA (Flexible Spending Account)Â
Check if your department or city offers a Dependent Care FSA as part of your benefits. A Dependent Care FSA lets you set aside pre-tax money from your paycheck to use for childcare expenses (for children under 13). In many plans, you can set aside up to $5,000 per year pre-tax. [7]
This is money you can use for daycare, preschool, or even after-school care down the line, and it’s tax-free. For a firefighter family, that could save you a chunk in taxes. For example, if you’re in the 22% federal tax bracket, putting $5,000 into a childcare FSA could save about $1,100 in taxes you’d otherwise owe. It’s basically a discount on childcare courtesy of Uncle Sam. Just remember: these FSAs are “use it or lose it” annually, so only set aside what you plan to spend that year.Â
Child Tax Credit
Don’t forget about the Child Tax Credit when you file your taxes. For the 2025 tax year, this credit is worth up to $2,000 per child under 17 (with up to $1,700 of it potentially refundable as of current rules). Essentially, this credit directly reduces your taxes owed, or can even result in a refund. [8]
To get the full credit, your income needs to be below certain thresholds. By the way, if your baby is born anytime during the calendar year, you’re generally eligible for the full year’s credit for that year’s taxes. So even if a baby is born in December 2025, you can still get the credit for 2025 taxes.
Child and Dependent Care Tax CreditÂ
This is a separate tax benefit from the Child Tax Credit. The Child and Dependent Care Credit gives you a tax break on a percentage of your childcare expenses (daycare, babysitters, etc.) while you and your spouse work. The credit allows certain expenses up to $3,000 for one child (or $6,000 for two or more) to be counted, and then a percentage of that (20%–35% typically) is credited back to you, depending on your income. [9]
In practice, if you spend, say, $10,000 on daycare for one baby in a year, you might get a credit of a few hundred dollars (since the max counted would be $3,000 * 20% = $600 in that scenario). If you’re using a Dependent Care FSA, you can’t double-dip the same expenses for this credit, but if your childcare costs exceed $5,000 (the FSA limit), you could FSA the first $5k and still potentially claim some remaining expenses for the credit. This stuff can get complex – consider consulting a tax advisor or using reputable tax software to maximize what you qualify for. The main point is, there’s some tax relief for childcare; it won’t cover the costs entirely, but every bit helps.
Also, look into local and state tax benefits: for instance, New Jersey offers a Child and Dependent Care Tax Credit for families earning under a certain threshold, which piggybacks on the federal credit.[10] It’s a credit that varies based on income and is a percentage of your federal childcare credit, essentially an extra tax break from the state if you qualify. Every state is different: some might offer credits, deductions, or even childcare subsidies for public service workers.Â
Education Savings and Other Long-Term PlanningÂ
Once your child is born, you’re eligible to open education savings accounts like a 529 college savings plan for them. It’s certainly not an immediate need, but even small contributions starting early can grow significantly over 18 years. Additionally, review your own retirement contributions. With a new family member, you might have competing financial priorities, but don’t entirely sideline your retirement savings – instead, aim for balance.
Family Protection Checklist
Essential steps to protect your growing firefighter family
Your Protection Progress
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Life Insurance Planning
Calculate if your current coverage (job/union) is adequate for your family's needs
Aim for 5-10 times your annual salary; consider term life insurance for affordability
Important for firefighters due to elevated cancer and health risks
Health Insurance
Must be done within 30-60 days after birth; verify coverage for pediatric care
Review yours vs. spouse's plan to find best coverage and costs for your family
Legal Documents & Beneficiaries
Include your new child and designate guardians in case something happens to both parents
Review life insurance, pension, 401(k), 457 plan, and other accounts
Understand and update your pension beneficiary options and survivor coverage
Ensure Your Family Is ProtectedÂ
As a firefighter, you face risks on every shift that most people never encounter. That’s why protecting your growing family with the right insurance and legal safeguards is absolutely crucial. The stakes are higher now – it’s not just about you anymore, but the loved ones who depend on you.
Life Insurance – A Must for Firefighter ParentsÂ
If you haven’t done so already, strongly consider updating or obtaining a life insurance policy once you’re expecting a child. Life insurance provides a financial safety net for your spouse and children if tragedy strikes and you’re no longer there to provide for them. Firefighting can be dangerous – occupational cancer is now the leading cause of line-of-duty deaths in the fire service (in fact, 72% of firefighter line-of-duty deaths in 2023 were due to job-related cancer) and there are other hazards as well. [11]
Many firefighters get some life insurance through their job or union, but it might not be enough. A common guideline is to have coverage roughly equal to 5–10 times your annual salary (or more, depending on debts and future needs like college). Term life insurance (coverage for a set number of years) is affordable and can be timed to last until your kids are grown. For example, a 20- or 30-year term policy can protect your family through your child’s dependent years.
Some firefighters opt for policies with living benefits or critical illness riders, which pay out if you’re diagnosed with serious illnesses like cancer. This can be particularly relevant given the elevated health risks in your profession. Insurance with living benefits can help cover medical costs or lost income if you survive a serious illness or injury but can’t work, effectively protecting your family’s finances even while you’re still alive. The bottom line: get adequate coverage in place and name your beneficiaries appropriately (more on that shortly).
Family Protection Planning
Essential financial safeguards for firefighter families
from job-related cancer
life insurance goal
to health insurance
Life Insurance
Firefighting carries elevated risks. Ensure your family's financial security with adequate coverage.
- Review current work/union coverage
- Consider term life insurance for affordability
- Add living benefits for cancer/illness protection
- Update beneficiaries after baby arrives
Health Insurance
Prepare for baby's arrival and ongoing pediatric care needs.
- Compare your vs. spouse's family plans
- Verify pediatric care coverage
- Check in-network providers
- Review maternity/newborn benefits
Legal Documents
Protect your child's future with proper legal safeguards and beneficiary updates.
- Update or create a will
- Designate child guardians
- Update all beneficiaries
- Review pension survivor benefits
Protection Planning Timeline
Review insurance coverage, update life insurance, prepare legal documents
Add baby to health insurance within 30-60 days
Update will, beneficiaries, and review family coverage annually
Health Insurance CheckupÂ
When your baby arrives, you’ll need to add them to your health insurance plan within the allowed window (usually 30 or 60 days after birth). Double-check what your plan covers for maternity and newborn care ahead of time so you’re not surprised by any gaps. As a firefighter, you might have access to robust health benefits, but make sure things like pediatric care, vaccinations, and possibly emergency care for the baby are in-network. If your spouse has a separate insurance plan, compare family plans – sometimes it’s cheaper to put the baby on one or the other, or one parent’s plan might offer better pediatric coverage. This is also a good time to revisit your own health insurance options; if there’s an opportunity to choose a plan with better family coverage (maybe during open enrollment), consider whether a slightly higher premium might save you money in the long run via lower copays or better networks for your child’s care.
Update Wills and BeneficiariesÂ
Getting your legal documents in order is a task many new parents put off – try not to. If you have an existing will, update it to include your new child (for instance, you may want to designate a guardian who would care for your child if something happened to both parents). If you don’t have a will at all, now is the time to create one. It can be simple, but it should clearly state who will be the child’s guardian and how your assets would be managed for them. This prevents confusion or legal battles at a time that would already be incredibly difficult for your family.
In addition, check all your beneficiary designations on things like your life insurance policies, pension, and retirement accounts (401(k), 457 plan, etc.). Make sure they reflect your current wishes – for example, you might list your spouse as primary beneficiary and your child as contingent, or perhaps set up a trust for the child. Firefighters often have pensions that provide a survivor benefit; if your pension plan requires choosing an option or listing beneficiaries, do this as soon as possible.
In Conclusion
Having a baby is one of life’s greatest joys, but yes, it comes with challenges. Financial planning is just another form of preparation to ensure your family stays safe, much like drilling for a fire emergency. By budgeting early, adjusting your spending, securing the right insurance, and using the benefits available to you, you’re helping ensure your family’s finances are protected against the unexpected.
With careful planning, you can focus on what truly matters – enjoying those precious moments with your new baby, knowing that your finances are under control. If you’d like a review of your financial plan to be confident it’s as prepared as you are for any additions to the family, just click the button below!Â
Sources:
- https://www.fastcompany.com/91310203/it-costs-nearly-300000-to-raise-a-child-in-2025
- https://www.kff.org/health-costs/press-release/women-who-give-birth-incur-nearly-19000-in-additional-health-costs-including-2854-more-that-they-pay-out-of-pocket/
- https://www.bebeangbaby.com/collections/premium-strollers
- https://www.healthline.com/health/parenting/how-much-does-it-cost-to-raise-a-baby-and-what-you-can-do-to-prepare
- https://www.newyorklife.com/articles/breakdown-of-biggest-expenses-for-your-child
- https://www.becu.org/blog/year-1-baby-costs-its-more-than-you-think
- https://www.nj.gov/treasury/pensions/documents/taxsave/fsa-flier.pdf
- https://www.nerdwallet.com/article/taxes/qualify-child-child-care-tax-credit
- https://www.irs.gov/taxtopics/tc602
- https://www.ccanj.org/employers/employee-child-care-tax-savings/
- https://www.mass.gov/info-details/information-and-statistics-about-cancer-in-the-fire-service
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