When you’re holding a newborn baby in your arms, it’s easy to banish negative thoughts. You’re more likely to be thinking about how her eyes remind you of your grandma, how tiny his hands are or what kind of person she’ll grow up to be. Maybe you’re looking forward to a first softball game or first camping trip.

No one wants to think about money during this sweet time.

But like it or not, motherhood and fatherhood come with a price tag. The first year of parenting can cost as much as $21,000 for a $40,000 income household.

If you plan ahead and get your ducks in a row before the baby is born, you can spend more time dreaming and less time stressing. Here’s how you can be prepared.

Call your insurance provider

The cost of giving birth in a hospital depends heavily on your insurance policy, so contact your provider directly to determine how much you’ll have to pay out of pocket.

“Ask a parent with more than one kid what is essential – buy that. And buy used whenever possible.”

The best way to save ahead for labor and delivery is with a Health Savings Account (HSA). Contributions to an HSA are tax-deductible, and you can contribute up to $3,400 a year per individual or $6,750 per family. The funds also roll over if you don’t use all of them.

Create a childcare plan

Childcare costs are the biggest surprise for new parents, many of whom will end up paying more than $1,000 a month for daycare (depending on the city).

Call around to your local childcare centers to see what the average cost is. You can also consider splitting a nanny with a friend or asking your retired in-laws to help out a few days a week.

If you decide to have one parent stay home with the child, do some math to see how your budget will change and research any parental leave options your employer provides.

Ask for hand-me-downs

Buying new clothes for a growing baby is like getting your car detailed and then going off roading in the desert: it may be fun but sadly, it’s a waste of money.

It’s tempting to get an adorable onesie from your alma mater or little Nikes, but your baby will probably grow out of them before they’ve worn it a third time.

Instead, ask your friends and family members if they have any extra baby clothes, toys and accessories you can take off their hands. You only need a few basics to get started: a week’s worth of outfits, a crib, stroller and a basic changing table.

Also worthwhile, asking your friends what they bought — and what they didn’t end up needing or using.

“All that other stuff is nice, but it’s also expensive and you may not use it as much as you think,” said Wallet Hacks blogger and father of two Jim Wang. “Ask a parent with more than one kid what is essential – buy that. And buy used whenever possible.”

Buy life insurance

No one likes to think about it but it’s reality. If you don’t already have life insurance, now’s the time to buy it, because it’s unlikely your spouse or partner will be able to afford caring for a child on just one income.

A term life policy, which requires monthly premium payments and covers you for the term of those payments, is usually best. Most people buy a plan based on how much they have left to pay on their mortgage, so your partner or spouse will have money to pay that off.

A good rule of thumb is to calculate how much you earn, multiplied by how many years worth of coverage you want, plus the mortgage, any other debts, funeral costs and college tuition.