People sure made a lot of babies during the pandemic!

Written by: Myles Ma

November 24, 2022

U.S.-born parents experienced a baby boom in the midst of the COVID-19 pandemic. Fertility rates had been dropping since the 2007 Great Recession, but the 2021 “baby bump” reversed that trend, a new study finds.

The study, published by the National Bureau of Economic Research, found the pandemic led to a net increase of 46,000 births among U.S.-born parents. While the study did not isolate the reasons for the fertility increase, the authors found it was especially pronounced among women with a college degree. These women likely benefited from greater workplace flexibility as many jobs switched to work-from-home arrangements, says Hannes Schwandt, a health economist at Northwestern University’s School of Education and Social Policy and an author of the paper.

“These results suggest that relaxing time constraints and career demands that highly educated women face can help them balance their work and private lives and allow them to have the children they may desire,” he says.

Related: 6 things to do when you have a second baby

6 things to do when you have a second baby

Getting ready for baby number two — When it comes to having a baby, some things are just easier the second time around. You have a better idea of what to expect. You’ve figured out some parenting tricks and you probably already have some newborn gear lying around. But the financial burden of having a second child is not on the “easy” list, and can cause a lot of stress if you’re unprepared. Here are six money moves to make when you’re expecting your second child.

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1. Revisit your budget — Chances are, you had to set a budget when your first kid came along, to account for diapers, wipes, baby clothes, food, furniture, gadgets and other expenses. You probably had to revise that budget as time went on to adjust for reality.

Now that you’re expecting again, it’s time to revisit your budget. Take a look at your current income and expenses and factor in the estimated costs of a new baby. You may need to reduce spending in some categories to make up for additional expenses in others. This simple budgeting spreadsheet for parents can help you make adjustments.

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2. Start saving (more) now — Most practitioners schedule ultrasound appointments to confirm the pregnancy and take a look at early vital signs six to nine weeks into the first trimester. That leaves you with some time to save for a second baby.

You might need extra funds to shoulder the cost of childbirth or furnish a new nursery, but you should also strive to establish a strong emergency fund to cover at least three to six month’s worth of expenses. A high-yield savings account can help you save for a rainy day.

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3. Start gathering baby gear — To avoid mass expenditures once the baby’s born, start collecting the stuff you need early and at a discount whenever possible. Always make necessities like diapers, wipes and clothes a priority over toys and gadgets.

If you’re having a baby shower, register for items you need that you’d like to avoid purchasing. Go through your older child’s stuff and identify what you can reuse. You can also hunt for gently used baby gadgets and furniture online and in secondhand stores to save cash.

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4. Re-evaluate your insurance — Major life events like the birth of a new child are perfect occasions to re-evaluate your insurance policies.

**Health insurance:** Make sure your health plan covers the baby’s delivery, hospital stay and subsequent care. If you feel your current health care plan is insufficient, you can switch providers once the baby is born. (The birth of a new child is a qualifying life event, so you can change coverage outside of open enrollment.) Consider the current cost of your policy. Weigh a higher premium vs. a higher deductible and look into how hard it is to keep your baby’s care in-network. Learn how to pick a health plan when pregnant.

**Life insurance:** If something happens to you, the other parent or both, your existing benefits may not be enough to cover the cost of an additional child. Take a look at your coverage and determine if you need to increase your benefits or purchase a new policy. You can figure out how much life insurance you need now that a new baby is on the way here.

**Disability insurance:** Disability insurance protects your ability to earn income in case you become too ill or injured to work before you reach retirement. An additional child may lead you to increase your coverage amount or benefit period.

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5. Figure out daycare costs — If both parents are working, you’ll need to figure out care for your new baby. You can often get a discount if your first and second child use the same provider. For example, a nanny may care for an additional child for a (relatively) small rate increase, and a day care center may offer discounted rates for your second kid. Either way, figure out your care and how you plan to afford it ASAP.

If you aren’t already using a Dependent Care Flexible Spending Account, see if you can sign up through your employer. These accounts let you contribute tax-free funds toward your dependent’s care, including preschool, summer day camp, babysitting services, daycare and more. The 2019 contribution limit is $5,000 if you’re married filing jointly or unmarried and $2,500 if you’re married filing separately.

Looking for more financial advice? Check out our financial guide for parents.

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6. Open a 529 college savings plan — The cost of higher education continues to rise. If you already have a 529 college savings plan for your first child, you should consider opening one for your second kid as well. (You can only have one beneficiary per 529 plan). The earnings on these investment vehicles are tax-free when used to pay for eligible education expenses including tuition and fees, room and board, books and other school supplies. Here’s how to open a 529 college savings plan.

*This article originally appeared on Policygenius and was syndicated by MediaFeed.org.*

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The COVID-19 baby bump

While U.S. fertility rates declined in 2020, most of the decline was concentrated at the very beginning of the pandemic, among parents born outside of the country. This suggests the drop may have reflected travel restrictions, rising health concerns, and the loss of economic opportunity for migrants. In contrast, U.S.-born parents showed little sign of a baby bust, the study finds.

Birth rates exceeded pre-pandemic trends among U.S.-born women in 2021 and 2022, a sign that conceptions rose in May and June 2020, and have remained higher than before the pandemic began.

The authors say the estimates show the importance of foreign-born parents in raising U.S. fertility rates. They also show the impact of the availability of child care and work-from-home arrangements. Conditions after the pandemic made it much easier for college-educated women in particular to have children, especially those who didn’t already have kids, since they had more flexible schedules and didn’t have to worry about schooling or child care for older kids.

Money moves for new parents

If you’ve experienced your own baby bump, there are a few things to add to your to-do-list to make sure you’re financially fit enough to afford the expense — about $13,000 a year by one estimate.

Redo your household budget: You’ll have new expenses like child care and recreation, and you can expect your grocery budget to grow.
Bulk up your emergency fund: In the event you lose your job or experience some other income loss, your savings account will have to feed an extra mouth, so raise your savings rate.
Protect your finances: Speaking of income loss, make sure your family is financially secure if you die or get disabled. The birth of a child is a great time to shop for life insurance, and you should also consider a disability insurance policy to replace your income in case you can’t work.
Save for college: With President Joe Biden’s plan to forgive a portion of student loan debt held up in court, there’s no sign that the cost of college will ease any time soon. A tax-advantaged 529 college savings plan is a good place to put your future scholar’s tuition money. Every bit helps.
Don’t neglect your own savings: With all these added expenses, it can be easy to forget your own goals, like retirement. But even 1% of your income can grow a lot over time if it’s invested properly, so don’t let your 401(k) or IRA gather cobwebs while you’re parenting.