As a one-child family, you might have been able to pay for diapers, pediatric care, childcare and other expenses without much trouble. But when the second arrives, the extra costs can feel overwhelming.

An American family spends an average of $25,410 per year to raise two children, compared with $16,104 for one child, according to the U.S. Department of Agriculture[1]. In addition to more baby gear, food and daycare costs, you may need a bigger home. You might have to trade the economy car for an SUV. And before you know it, you'll have two kids enrolling in college. How do you pay for all this without sacrificing your quality of life?

Here are some tips to help you budget for the many compounding costs that come with a growing family.

Daycare Costs

One in three families spend 20 percent or more of its annual household income on childcare, according to a survey[2]. The average daycare cost for one child averages $211 per week. Look into using an online childcare calculator for an estimate of costs in your area.

If you're thinking about childcare, consider these and other ways to save:

  • Coordinate schedules with your partner so you each cover some of the care.
  • Look into a part-time nanny, which could be less expensive than a full-time daycare center.
  • Search for a daycare provider offering sibling discounts. 
  • Talk with your employer(s) about flex time and/or telecommuting options.
  • Does your gym membership include daycare? Many offer a few hours of low-cost childcare.

Spend Less on Extras

Little things such as food, clothes and diapers can actually make big dents in your budget. Here are some ways to cut costs:

  • Use cloth diapers. You could save up to $60 per month, a BabyCenter[3] article reports.
  • Reuse and buy used furniture. If still in good condition, you can reuse cribs, strollers and swings with child number two or three. For anything you can't reuse, buy used items from garage sales, community sites such as NextDoor and Craigslist, and secondhand stores. Just be sure that the sellers are trusted and safe sources before purchasing. One exception: car seats. Consumer Reports recommends buying car seats new because they have expiration dates. Also, you can't tell if used car seats have been involved in a crash.
  • Use hand-me-down clothes and you could save $50 or more per month, according to BabyCenter[3] estimates. Reuse your oldest child's clothes, accept hand-me-downs from friends and scour the internet for good online deals.
  • Food. At $1 or more per jar, baby food gets expensive. Make your own in the blender to cut costs. 

Plump up Your Emergency Fund

You never know what unexpected expenses may crop up at any moment. Your oldest child might need stitches. Your six-month-old may come down with a string of illnesses. The dog might chew up the stroller (it could happen!).

Consider opening or growing a savings account to help cover surprise expenses. And if you can, try to set aside close to the maximum into a health savings account (HSA) (in 2019 that's $3,500 for individual accounts and $7,000 for family accounts). You can apply HSA funds to tax dependents.

Saving for college, healthcare and emergencies may feel like a stretch, but now is not the time to neglect your own retirement savings, either. Remember, your life goes on after the kids have left for college.

No matter how many you may already have, deciding whether to have another child can require serious financial and personal planning. But with an eye on your budget, you can more easily enjoy one of life's most rewarding journeys.

A qualified financial expert can help you gain the confidence you need to reach your financial goals when growing your family.