Having a baby is exciting. And overwhelming. And expensive.
Your life will change, and so will your bank account.
But while your precious little one won’t come with an instruction manual, there’s plenty you can do to prepare yourself for managing all the new costs associated with raising an infant.
Your income may stay the same — or even decline a bit if you take time off or cut back your hours when the baby comes — but with some proactive financial planning, you can find ways to cover the additional expenses you’ll face.
If only it were so simple to find more time in the day for a decent nap.
Budgeting for a Baby: How to Get Started
Babies are tiny, but they come with a bunch of needs. If you don’t have a surplus in your budget before having your baby, you’ll likely have to make some sacrifices.
A good approach is to create a new budget based on the bare-bones expenses of your family. Focus on essentials — like housing, utilities, food, transportation and medical expenses — plus the baby-related necessities, like child care, diapers, clothing and formula.
If you have room left in your budget, that’s where you can allocate money for discretionary spending, saving, investing or paying down debt.
Using a zero-based budget to determine where every dollar is going can be super helpful for a new parent. A zero-based budget will lay out exactly how much you will spend in each of your budgeting categories until all of your income is accounted for.
Nora and Shane Martin, of Palm Harbor, Florida, used a zero-based budget to keep track of expenses and help save up before having their son, Turner. They cut back on dining out, entertainment and spending on their dogs.
Nora also created a spreadsheet to identify all the baby items she thought they’d need.
“My list was ridiculous,” she said. “Like any new, first-time mom, you buy all the stuff.”
Now that they’re expecting a second child, Nora said she has a better idea of what she really needs to budget for.
Saving Money Before Your Baby Arrives
Shane Martin shares his lollipop with his 17-month-old son, Turner Martin, before lunchtime while Nora Martin works on their budget. The Martins used a zero-based budget when Nora was pregnant with Turner. Tina Russell/The Penny Hoarder
If you or your partner plan to quit a job, work fewer hours or take unpaid time off after your baby is born, create your budget now based on what your income will be in the future.
By living off one income during the pregnancy, you can build up a significant amount of savings for all those one-time expenses your new baby will require. (More on that a little later.)
To make sure you don’t stray from your budget, you may want to automate your monthly bills and switch to cash for your variable expenses like groceries or entertainment. The cash envelope method helps budgeters avoid overspending, because once you’ve spent all the cash in your envelopes, that’s it until payday.
If you find yourself in the negative when you draft up your budget, you’ll need to find ways to lower your expenses or increase your income.
To increase your income, try negotiating for a raise or picking up a temporary side gig. Purge your home of any unwanted items and sell them for extra cash.
Trim your budget down by reducing unnecessary spending like the Martins did. Call your service providers to see if you can lower your phone, internet, cable or insurance bills. You can also consolidate your debt or transfer your credit card balance to a card with 0% interest to save money fast.
You may have to sacrifice some of your financial goals when you’re a new parent. It’s smart to save money for emergencies and retirement, but that’s assuming you have a handle on your day-to-day expenses.
If you’re working on a tight budget, you may only be able to afford to make minimum debt payments or contribute just enough to your 401(k) to meet your employer’s match.
These financial sacrifices don’t have to be permanent. The first few years of a child’s life are some of the most expensive. It won’t last forever.
After time, your kid will be out of diapers and graduating preschool, and your budget will feel some relief.
Recurring Baby Costs to Include in Your Budget
Nora laughs as Turner reacts to seeing a bird outside of their home. To save money, Nora plans to food prep when the second baby arrives. Tina Russell/The Penny Hoarder
If you aren’t used to caring for an infant, you might be surprised by all the expenses you’ll be adding to your budget during your child’s first years of life.
BabyCenter has a baby costs calculator to help you estimate how much you’ll spend during your baby’s first year.
But here’s a rundown of the major things you’ll need to pay for on a regular basis — along with estimates of their costs.
Formula: If you’re formula feeding, you might spend anywhere from $50 to well over $100 per month on formula, depending on how much your baby consumes, the type of formula and the brand.
Money-saving tips: Choose a generic brand, use powdered formula instead of liquid, ask your doctor for free samples, or reach out to the formula brand for coupons or samples.
Milk storage bags: If you’re pumping and storing breast milk, you might spend about $15 to $20 for a package of 100 bags.
Money-saving tip: Pump milk directly into bottles and store in the fridge. You can store breast milk in the fridge for three to five days. You could also freeze breast milk in freezer-safe containers.
Baby food: Expect to spend between $1 and $1.50 for each jar or pouch of baby food. Once your baby starts eating solid food (around 4 to 6 months old), you could spend from $60 to $135 per month on baby food.
Money-saving tip: Make your own baby food by pureeing some of the food you already have at home.
Clothing and Diapering
Clothing: Babies grow a significant amount in their first year. About every three months, they’ll move up in size. And babies tend to soil their clothing frequently, so it’s not uncommon for them to go through a couple outfits in one day.
If you’re buying new clothes, you might spend $10 to $15 per outfit, or you can buy bodysuits for under $10. You can buy packs of baby socks for about $1 per pair.
Money-saving tips: Ask family and friends for hand-me-downs, or shop at secondhand stores. Don’t buy a bunch of newborn-sized clothes; your baby will likely outgrow those quickly. Don’t bother buying infant shoes until your baby starts walking.
Diapers: The cost of disposable diapers varies by size and brand. It’s worth noting that smaller diapers cost less, but younger babies tend to go through diapers more frequently than older babies.
If you’re changing your newborn 10 times a day, you can expect to use $30 worth of diapers each month if you’re paying 10 cents per diaper, or about $90 a month if you’re paying 30 cents per diaper.
Money-saving tips: Buy generic diapers to save money. You also get more for your money by buying in bulk, although you may not want to stock up on newborn sizes that your baby will quickly outgrow.
Cloth diapers can also save parents money over the course of their babies’ lives, but they require a large upfront investment. Cloth diapers range from $5 to more than $10 per diaper. They’re best purchased in sets. You’d probably want at least two dozen diapers on hand if you don’t plan to do laundry every single day.
Baby wipes: You could spend about $1.50 on a single pack of wipes that will last you a week, or you could drop about $15 on a bulk package that could last a few months.
Money-saving tip: Use baby washcloths in lieu of disposable wipes.
Nora reads to Turner in his bedroom. One way the Martins plan to save money is to buy cloth diapers instead of using disposable diapers like they did with Turner. Tina Russell/The Penny Hoarder
Child care is often the most expensive recurring cost new parents face. Last year, The Penny Hoarder surveyed over 1,200 parents about their child care costs, and 82% said they spent $500 or more each month. The amount parents spent varied by the age of their child, where they live and what type of child care setting they chose.
Infant child care is typically the most expensive type of care. Parents can easily spend over $1,000 every month for infant care.
An in-home child care provider (who watches several children at their house) typically charges less than a child care center. An even more expensive option is hiring a nanny to come to your home.
Money-saving tips: Eliminating the need for child care is the most obvious way to save money — either by becoming a stay-at-home parent, working opposite shifts from your partner, or having a grandparent or loved one provide free child care.
But you can also look into child care assistance programs through the government or your employer. Child Care Aware, a nonprofit child care advocacy organization, provides information on resources available in each state.
You could also reduce the cost of child care by bringing your baby to work, sharing a nanny with another family, or putting your child in the care of students training to become early childhood educators.
Medical costs: Check with your employer to find out how much your health insurance premiums will increase by adding a child to your policy. Save room in your budget for doctor’s office copays every couple months as your baby fights illnesses or develops rashes. You can also expect to spend about $10 on vitamins every few months.
Money-saving tip: Take your baby to all scheduled well visit checkups so your doctor can assess the baby’s growth, make sure your infant is healthy and administer vaccinations.
Since these checkups are considered preventative care, you likely won’t have a copay.
Life insurance premiums: As a new parent, you should get a life insurance policy if you don’t have one already. You could pay as little as $30 per month for $1 million in coverage.
Money-saving tip: Get quotes from multiple insurance providers to compare costs.
Save Money for These One-Time Baby Purchases
Nora shows the budget she used when she was pregnant with Turner. Tina Russell/The Penny Hoarder
In addition to all the ongoing costs you’ll be dealing with as a new parent, there will be a slew of one-time purchases you’ll need to make.
One great way to save on baby gear is to throw a baby shower. Fill your baby registry with essential, practical items — plus all the goodies you think would be nice to have.
After the baby shower, take inventory of the things you still need. See what you can get secondhand from garage sales, thrift stores, online marketplaces, friends, family or neighbors. Determine what you need immediately, like a car seat, and what you can buy a few months down the line, like a high chair.
As you’re buying things to prepare for the new baby, try not to get swept up in the preciousness of all the little things. They might be so incredibly adorable, but going into debt from overspending isn’t cute.
- Cribs: You can expect to spend between $150 and $400 on a good crib. Many parents opt for buying a new crib, because used cribs may not adhere to the latest safety standards. But many cribs on the market today convert into toddler beds — with some also converting into day beds and full-size beds.
That allows you to get many years of use out of this piece of baby furniture.
- Crib mattress: Those cribs need a tiny mattress for your little one to rest on. You can expect to spend about $50 to $100 on a decent crib mattress.
- Crib sheets: You can find fitted crib sheets for less than $20. You can also find a crib mattress pad or mattress protector for about the same price.
It’s good to have a few spare sheets and mattress covers on hand. The amount you’ll need will depend on how frequently you plan to wash them — and how messy your baby will be.
- Safety gear: You could spend $20 or more on safety gear, depending on how many cabinets you need to lock, how many plugs you need to cover, or how much furniture you need to anchor to keep your baby safe.
Cleaning and Grooming
- Bath gear: You can snag an infant tub for around $20 to $30. Baby washcloths can be purchased in sets at less than $1 per washcloth. You can find baby towels for less than $10, or purchase them in sets for an even better deal.
- Baby grooming kit: A kit with items such as a brush, comb, nail clipper, nasal aspirator and thermometer can cost between $10 and $20.
Shane, Turner and Nora Martin take a late morning stroll around the neighborhood. Tina Russell/The Penny Hoarder
- Car seat: You can expect to spend between $50 and $300 on a car seat. As with cribs, it is recommended that parents buy this new rather than used due to safety standards.
You could choose to buy an infant seat, which is easily portable, designed to be rear-facing and can often connect to a stroller system. These will be good for the baby’s first year or two.
Or, you could buy a convertible seat. These are larger and not easily portable but made to convert from rear-facing to forward-facing so that a child can get more years of use out of the seat. Some even convert to booster seats.
- Stroller: Many strollers (or travel systems that include an infant car seat) range between $100 to $400, though you can purchase a lightweight umbrella stroller for under $20 for babies who can sit up independently.
- Diaper bag: You can spend from $20 to $85 on a diaper bag. Some diaper bags are designed to be carried on the shoulder, while others have straps like a backpack.
- Bottles: A pack of three bottles will cost between $5 and $20. The amount of bottles you need will depend on how frequently you bottle-feed and how often you plan to wash your bottles. Newborns will need to be fed every couple of hours.
- Breast pump: A manual breast pump could cost around $30, while an electric breast pump might cost between $100 and $200. However, your health insurance plan may cover the cost.
- Bibs: Bibs can be purchased in packs for about $1 per bib. Babies can make a big mess when they eat, so it’s good to have several bibs on hand.
- Bouncers, swings or rockers: These motion seats for babies can range from $30 to $200 each.
- Portable play yard: You can spend between $50 and $250 on a portable play yard.
- High chair: You could spend up to $100 or more on a high chair, or purchase a booster seat that attaches to your dining room chair for $20 to $30.
- Baby monitor: A baby monitor can range from less than $40 for an audio monitor to over $200 for a high-tech video monitor.
- Bassinet: You can buy a baby bassinet for $50 to $100..
- Pacifiers: Pacifiers usually cost a couple dollars each.
- Teethers: You can purchase teethers for $5 to $10.
- Toys: Toys vary in style, age range and, of course, price.
You can purchase baby toys for under $10, while others cost over $50.
Nicole Dow is a senior writer at The Penny Hoarder. She’s a thrifty mom who embraced hand-me-downs, breastfeeding and a minimalist approach to baby gear. She also experimented with cloth diapering and homemade baby food.