Most moms and dads will tell you: parenthood is an ongoing learning experience. But it doesn't hurt to be as prepared for it as possible. Kids are adorable, but they're also expensive. Data shows that the average middle-income family will spend over $165,000 raising a child. Here's a guide to financially preparing for parenthood.


Know Your Health Insurance Policy

Even if you have health insurance, you'll probably be accountable for some out-of-pocket expenses when it comes to your childbirth. According to The Nest, the out-of-pocket costs of hospital bills from a pregnancy can range from $500 to $3,000. This includes your deductible and co-pay.


Club Thrifty founder Holly Johnson says moms-to-be should know their health insurance policies and have a clear idea of how much you'll owe when everything is said and done. She told us:

"Our biggest expense so far has been actually having our children in the hospital. Both times, our deductible was around $4,000. We also had to purchase an expensive maternity rider to have our first child...the huge expenses we endured were for extremely healthy children….we saved for the expense ahead of time, and that really helped soften the blow."

You can also find a plan through the Marketplace. WebMD explains that these plans are required to cover preventive care. Some employer-sponsored health plans cover the same services. Whatever plan you choose, make sure you know what your deductible is, and check that your preferred doctor and OB-GYN are in your network.

Find the best plan for you—then, fully understand it. Read your policy's explanation of benefits to prepare for the medical costs of pregnancy and childbirth.


Get Life Insurance

When you start a family, it's time to sign up for life insurance (though there's a case to be made that you should have it before you start a family, too). Parenting.com suggests applying early in your pregnancy or right after delivering:

"Most companies won't consider you within 60 days of your due date because of potential risks-your first postpartum checkup is usually a good time to qualify. In many cases, the insurance company will send someone to your home to conduct a physical; after that, it often takes one to three months before your policy takes effect."


You can choose term or permanent insurance. Term insurance pays a lump sum in case of the worst, whereas permanent insurance pays what you've contributed to the policy. For pros and cons on each, check out Parenting's full post. To make the decision easier, finance writer MP Dunleavey suggests going with a 20-year term life insurance plan. She adds that you can switch later, when you have more time to decide.


Sign Up for Short-Term Disability Insurance

In some states, employers are required to offer short-term disability insurance to cover the cost of maternity leave. Even if yours doesn't, you should consider signing up for it. Living site Real Simple explains:

"Short-term disability insurance can provide a portion of your salary if you are temporarily unable to work due to a medical condition, including pregnancy. Private disability insurance may cover between half and all of your salary."


Of course, if you're shopping for your own policy, make sure that pregnancies are covered.

Plan for Bigger Monthly Budget

"Little surprising costs add up the first year," Lifehacker's Melanie Pinola says. "Preparing a nursery, added food costs if mom is nursing, extra heating needs (must keep baby warm), pediatrician visits..."


With your new addition, your budget will expand. Readjust your current monthly expenses to include the extra costs. Johnson says that, hands-down, the expense that surprised her most was diapers and formula.

"They don't cost that much on a weekly basis, but it sure does add up. Once I stopped breastfeeding, we were easily spending $20 per week on formula."


Prepare for the following budgetary changes. Parenting site Just Mommies also adds an estimate of the monthly cost for each item:

Diapers: $60

Wipes: $15

Baby formula and food: $100

Child care: $400-$2,800

Doctor's office copays: $25-$100

Toys and books: $15-$40

Also consider baby clothes, shampoo and other hygiene products that add up. If you're planning to contribute to an education fund for your child, factor in that expense, too.


Create a Baby Fund

And for those one-time expenses, like your massive hospital bill, it might help to start a baby fund as soon as you discover you're expecting. Or, if you plan to have a child within the next few years, you might start that fund now. Either way, save up for things like:

Maternity clothes

Nursing tops

Strollers

Car seats

Diaper bags

Cribs and other baby furniture

Baby monitor

Breast pumps and milk bags

Pacifiers

Safety gates

Bottles and bottle brushes

The cost of decorating your nursery

Research prices, then figure out how much you'll need to have in your baby fund. Just Mommies estimates that these one-time expenses will range from $1,685 to $4,625. Of course, this doesn't consider the medical bills.


Rethink Your Debt

Somewhat surprisingly, debt adversary Dave Ramsey says you should stop focusing on debt when you start budgeting for a baby. He advises:

"Continue to make the minimum payments on your debt and save all extra money for potential emergencies throughout pregnancy or at birth. As soon as baby and mom are declared healthy, you can pay off a big chunk of your debt and move forward with your plan."


Consider Income Changes

Even if you sign up for short-term disability insurance, it pays to consider how your take-home pay will change once you have a baby.


Ramsey suggests to decide whether you'll continue working or stay at home full time. Consider whether you'll need to pay for childcare, or if a spouse or relative will watch your baby. Then, start living with your "new" income, so you can financially prepare for the change.

If you and a spouse are currently living on two incomes, determine if you can manage to live on one income, Pinola adds. "Lots of couples decide one parent will stay home after doing the math and finding out how much daycare really runs."


Avoid Overspending

Ditch the nonessentials

Babies are expensive enough as it is, but many parents overspend on products they don't really need. If you're on a tight budget, avoid this. Johnson says:

"I went all-out for our first child. Things like fancy photo shoots, Bellini baby furniture, and custom-made birthday outfits. But, by the time we had our second, I realized that all of that was a waste of money. When you first get pregnant and walk into one of the big box baby stores, it's easy to become overwhelmed with all the things you 'need.'"


Most of these products, you can do without, Johnson explains. She adds that friends and family will get tempted by adorable, but non-essential baby items, too. Her suggestion?

"Return it all and buy something practical- like diapers (reusable or disposable), baby formula or a reliable breast pump, or a safe car seat that adjusts to fit them as they age. Your budget will thank you."


Buy second-hand

Because babies outgrow things fairly quickly, you can find great deals on second-hand items. Johnson explains that you can find high-quality items for a fraction of their original cost. Many times, these items have been so gently used, that they're like new.


Probably no one has ever said that parenthood is easy. There's so much you can never expect in raising a child. But when it comes to the expense of parenthood, it pays to research the costs beforehand so you know what to look out for later.

Two Cents is a new blog from Lifehacker all about personal finance. Follow us on Twitter here.