Expectant parents can expect a lot of surprises once the newest addition to the family is born, including financial surprises. Instead of waiting until the last minute and confronting all these surprises at once, the financial wizards at Money Magazine suggest approaching a baby budget like a pregnancy, one trimester at a time.

Pregnant with piggy bank

First Trimester

  • Work up a baby budget: Expect 12 months of disposable diapers to cost a minimum of $900. Tally up the anticipated costs of baby foods, baby powder and shampoo, clothes, and other baby-only expenses (including laundry supplies) you can expect during baby’s first year. Online financial calculators can help.
  • Calculate child care: Make some investigative phone calls for day-care costs in your area if both parents will work after baby arrives. National averages range from $4,900 to $16,400 a year.
  • Free up some cash: Eliminate as much credit card debt as possible before the baby is born. Aim to have three months’ worth of living expenses saved by baby’s birthdate. Sock away more if someone will stop working to stay home with baby.
  • Inquire about insurance coverage: Contact your healthcare insurance provider to see how much they’ll cover so you’ll know how much your out-of-pocket prenatal and delivery costs will be.

Second Trimester

  • Insure your life and your health: Medical insurance isn’t enough anymore. Explore term life and disability insurance with a child’s future in mind.
  • Make a will: A DIY will online is perfectly fine and affordable; baby’s name doesn’t even need to be included. Name a guardian, too.
  • Maternity leave matters: Discuss your company’s maternity leave policy with human resources personnel and your boss, if it’s available. Only about 16% of US employers offer this important perk.

Third Trimester

  • Feather the nest: Other parents are the experts here. Ask them what they’ve really used and what collected dust. Ask someone to host a baby shower and register for what you really want or need to reduce duplication or undesired stuff.
  • Open a 529 savings plan: Put all baby gifts of money into this account to stockpile, tax free, for college.

After Baby’s Born

  • Get her insured: Healthcare providers allow 30 days after delivery to sign up a new baby. If you’ve got a flex plan or medical savings account available, activate it to offset OTC baby expenses.
  • Introduce your little deduction to the IRS: The 2014 deduction for children is $3,950 per child.

If annual household income is $105,000, the US Department of Agriculture estimates you’ll spend $400,000 on the baby alone between the day it’s born until its 18th birthday. Plan for known expenses but be prepared for surprises, too.

Source: Cheney, Karen. “Baby on the way? Time to make a budget.” TIME. Cable News Network / Time Warner. Mar 3, 2014. Web. May 9, 2014.