Pregnant woman with piggy bank

Ellie Kay, a Moms Money Clinic advisor for Parents, guest blogs regularly to answer mail about money issues. Today she's helping expectant parents navigate the challenges of preparing for a baby.

Q. We are expecting our first child, and it seems like it's more expensive than ever to raise a baby. What are some creative ways we can prepare for the new addition and try to stretch our "baby bucks?"

A. I understand how concerned you are about rising expenses. It costs more than $245,000 to raise a child to age 18, according to the U.S. Department of Agriculture. And for new parents, the diapers, clothing, furniture, stroller, car seat, and other necessities can really add up. One thing that helps: Making the most of a baby shower. Chances are your hostess will ask for a "wish list," and that's where you can choose wisely.

- Be fashionable First, take inventory of what infant clothing you have and what you really need. Don't be shy about asking for different size clothing starting with 3 to 6 months. Your newborn might not even fit into the tiny 0 to 3 month clothing (our youngest started out in 6 to 9 month outfits). Pick up a few of the smallest sizes from garage sales so you'll have a supply on hand.

- Be specific It's not self-serving to ask for the exact baby things you want. A good hostess will ask you for a list and include your requests on the invitation. Most people appreciate knowing what to get.

- Be prompt on returns After your baby arrives, people will ask how they can help. If you didn't have a chance to return and exchange baby clothes, or if your child is a different gender than you expected, ask a friend to run this errand for you. She can get you a gift certificate, and then you can purchase the exact size and style your child needs. I once received two outfits that were too small and cost $45 each. By shopping the sales after returning them, I was able to buy 12 outfits.

Q. We are having twins and are considering a nanny for the first year. What do I need to know about the tax issues in hiring someone?

A. Congratulations on twice the blessings! I always wanted twins, but my husband said that after seven Kay kids, twins were not a part of our future. If you plan to employ a nanny, you'll need to add up all the costs and talk to your tax professional. Keep in mind that it can cost anywhere from $5,000 to $50,000 per year—and in some cases, the taxes can cost almost as much as the salary itself.

You've no doubt heard the buzz about the various nanny taxes that employers are required to remit to the government. You may be tempted to avoid paying these in the hope of cutting costs. Don't. If you get caught, you may find yourself on the hook for your share of back taxes, the nanny's share, plus penalties and interest. If you pay an employee more than $1900 per year, you are considered a household employer. If that's the case, go here to learn about how to keep her "on the books." Good luck!

Ellie Kay

Ellie Kay is a family financial expert, the author of The 60-Minute Money Workout, and a mom of seven. Read more of her advice at

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