A mother with her newborn.
A mother with her newborn. - 
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On this week's Ask Carmen segment, listener Andrew and his wife are having their first baby. Carmen gave some things to consider before the baby is born.

According to the USDA's latest analysis, the average cost of raising a child born last year until their 18th birthday will be around $250,000. And if you live in a high cost-of-living area, like Andrew in New York, that number can easily get close to $500,000. 

Your finances are going to change, drastically. And beyond cutting back expenses like dining out, it's important to consider your future. Ask yourself these questions:

Do you want to move?

Do you plan on buying a home or keep renting? It's important to have moving planned into your budget, or better yet, in advance of your child being born, before child care costs start ramping up.

What's your savings outlook?

Do you have wiggle room in your budget right now, before your child is born? Are you still saving your retirement, too? You're probably in a good place to afford your new baby if you can answer yes to both of those questions.

Will you both be working?

If both parents are heading back to work, child care costs like day care and/or a baby-sitter can really add up. Child care is usually the biggest expense when it comes to a new baby; nationwide new parents spend around 10 percent of their income on taking care of their baby. But, if you pay for a licensed day care, or hire a babysitter registered with the IRS as a child caretaker, those costs can be deducted from your taxes.

Do you both have health insurance?

Your hospital stay when the baby is born will probably be expensive, and it's likely your monthly premiums will go up, too. But medical costs can be deducted off your taxes, too. If your medical costs exceed 8.5 percent of your Adjusted Gross Income, they can be deducted, so keep track of your co-pays and what you pay for coverage.

Do you have life insurance?

Carmen says it's very important for parents to have life insurance, so make sure you've planned for that in your new budget. Have a will and a trust set up, too.