How to Financially Prepare for a Baby
With the rising cost of everything, it can be overwhelming to think about the expense that comes with having a baby. But, having a baby on a budget is totally reasonable and can be done with some simple planning. I will share with you some of the best tips and tricks on how to financially prepare for a baby so that you feel more prepared heading into this new life adventure!
There are 5 main categories of expenses related to having a baby that you need to consider and they are:
- prenatal care
- labor and birth
- postpartum care
- baby essentials
- clothes (baby and maternity)
We’ll take a look at each of these and how they affect your plan of how to financially prepare for a baby.
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I am a planner, and I like to see things laid out for me so I have a path to get to where I want to be. As you head into pregnancy, or if you’re already pregnant, it will be helpful to know when to do what. This simple chart will give you a tangible task each month to help you feel more prepared to have a baby on a budget.
A month-by-month plan to financially prepare for your baby’s arrival!
Month 1: Identify Your Current Spending Habits/ Establish a Budget
Month 2: Decide If You’re Returning to Work or Becoming a SAHM
Month 3: Start a Rainy Day Fund for the Unexpected
Month 4: Determine Maternity/Paternity Leave
Month 5: Get a Cost Estimate for Your Delivery (Vaginal and C-Section)
Month 6: Find a Daycare and Add Expense to Monthly Budget (if needed)
Month 7: Choose Your Baby Necessities and Create Your Baby Registry
Month 8: Identify What Baby Gear You Still Need After Baby Showers
Month 9: Stock Up on Family Necessities Before Giving Birth
Month 10: Use the Snowball Method for Paying Off Bills as They Arrive
How much should you have saved before having a baby?
This question is going to be different for everyone. It first begins with a decision of if you’re going to keep working or become a stay-at-home mom.
If you plan to become a stay-at-home mom, you’ll want to make sure you have a good safety net to fall into should any emergencies arise. You’ll also want to make sure you have created a budget based on your significant other’s income. This will give you an idea of how much money you need to save before having a baby.
If you plan to work, you’ll want to make sure you have saved enough to cover any unexpected expenses that would happen while you’re on maternity leave. This will give you some extra money if you need to pay for something extra while you’re off taking care of your new baby.
Unfortunately, there is no one-size-fits all, answer to how much money you should save before having a baby. Assess your budget and you’ll have a good idea of the amount of money to save! I would recommend you have several thousand dollars saved if you’re able to.
What to Buy when Having a Baby on a Budget
So, how much does a baby cost per month on average? Let’s take a look so you can add this to your baby on a Budget plan.
Diapers
The price of diapers varies based on the age of your baby and the baby brand. Newborns go through way more diapers than an older baby. On average with today’s diaper prices, I would budget $60-80 for a month’s worth of diapers. These Huggies Little Snugglers diapers are the diapers I liked the most that had a reasonable cost. For a year’s worth of diapers, you can expect to spend around $840.
Wipes
I tried a lot a baby wipes during the baby years. Some babies skin doesn’t tolerate certain ingredients, so be prepared to pivot and switch brands if needed. I liked these Huggies Natural Care baby wipes because the cost was reasonable and I thought they did a good job with cleanup. Baby wipes are good for the obvious task of diaper changes, but as your baby grows you’ll be using them for all the things. With the current cost, I would estimate about $10-15 per month in baby wipes. So, it would be around $150 for a year of baby wipes.
Baby Formula or Breast Milk Bags
If you’re breastfeeding, you’ll get to skip this line item expense. But, if you’re planning to pump breast milk or formula feed, this is for you. I used a variety of breast milk bags when I was breastfeeding and pumping. I liked the Lansinoh breast milk bags because I didn’t have issues with them leaking, which saved me money. On average I spent around $35 per month on breast milk storage bags. So around $420 for the first year.
If you plan to formula feed your baby, let’s take a look at that expense. For the few few weeks, and even the first few months, your baby is going to be slowly increasing the amount of formula they need in a day. So I’m going to do an overall average to keep things simple. On average, for the first couple months, you can expect a cost of around $4-$10 per day depending on the infant formula you’re using. From 4 months to 6 months, that cost increases to $8- $20 per day. And from 7 months to a year, the cost will actually decrease as solid food is introduced, so let’s estimate around $4-$10 per day.
In case your head is spinning, let me make this simple.
Birth – 3 Months: $750
4 Months- 6 Months: $1,080
7 Months – 12 Months: $1,080
Give or take $1,000 either way (which I understand is a lot, but there are a lot of variables in this), the average you can expect to spend would be around $3,000 for a year of formula.
Baby Food
If we’re talking about all the baby consumables for the first year, we can’t skip baby food. Around 6 months, most people start introducing baby food. Some start at four months, and others wait longer, but I’m going to use 6 months for our budget. I made my own baby food, and I have a complete guide for baby food DIY that can save money. But, we’re going to use Happy Baby food pouches for our calculations.
Let’s estimate around $5 per day for baby food. That would be around $900 on average for 6 months of baby food. But, let’s throw in some snacks, because babies love to learn how to feed themselves. I easily spent $30-$50 per month on snacks. Total for 6 months of baby snacks would be around $240.
Now that we have covered all of the monthly expenses ($430 per month), you can expect to spend around $5,000 for the first year of your baby’s life.
Convertible Baby Stroller
A simple fix to eliminate several pieces of baby gear is to buy the Doona infant travel system. This is a stroller and car seat all in one. It’s easy to install and use.
Something for Baby to Sleep In
Some people choose to use a bassinet, others choose to use a pack n’ play, and some choose to go straight to an infant crib. I liked having this Graco Pack and Play with the bassinet and changing station. We used it for the first few months because it had everything all in one place.
Baby Clothes
Hopefully you get a lot of great clothes at your baby shower, and this can be a minimal expense for you. If you’re on a tight budget, I highly recommend shopping second hand. I can usually get a year’s worth of clothes for each of my kids between $100-$200.
Baby Blankets
I recommend having at least 5 blankets. I liked the aden & anais swaddle blankets the best. They’re great for everything! I also recommend having some warmer blankets as well.
Baby Socks
You’ll want several sets of quality baby socks. I love the socks with grips, especially as your little on becomes mobile. I like the Burt’s Bees unisex baby socks.
What to Skip When Having a Baby on a Budget
Changing Table
You can totally skip the changing table, especially if you have a pack and play with the changing station. Or, you can change them anywhere on the ground with a blanket.
Diaper Pail
I was gifted several of these and never used one. I didn’t understand the added expense when I could just toss the dirty diapers in the trash.
Wipes Warmer
This was another baby expense that didn’t fit my plan of having a baby on a budget. For this reason, we skipped the wipe warmer.
How to Prepare Financially Before Having a Baby
Get Life Insurance
When my first pregnancy hit 26 weeks, my priority was getting life insurance. I did all the medical exams I had to do, and I had life insurance by the time I was 30 weeks pregnant. I wanted to make sure my baby would be provided for if something happened to me. You don’t have to get an expensive life insurance plan; just get something that will take care of your baby for a few years.
Create a Living Will
Along with purchasing life insurance, we created our living will and set up a trust. If something were to happen to both me and my husband, we wanted things to be as easy as possible for whoever would be taking care of our baby. A living will ensured this, and a trust allowed for the quickest and easiest access to money to care for our little one.
Pay Off as Much Debt as Possible
Now is the time to get a fast and furious attitude towards paying off your debt. You currently have the most money coming in that you can assign to paying off your debt. Regardless of whether you’ll continue working, or if you plan to become a stay-at-home mom, you will never have this much money because babies cost money. So, evaluate how much money you can be throwing towards paying off your debt, starting with the smallest amount, and move forward from there.
Save for Unexpected Expenses
Even the best planning can be thrown off by unexpected bills. I ended up in the ER after my first 2 deliveries, each with a different complication. You cannot know what will come your way, but you can have money set aside knowing something will eventually happen.
Check Local Daycare Prices if Going Back to Work
If you’re planning to head back to work after having your baby, you’ll want to identify childcare. Once you know who will be caring for your baby, add that cost to your budget.
Verify Medical Insurance Coverage
It’s important to have a general idea of what you’ll be paying for your delivery BEFORE giving birth. Now is the time to figure out how much you can expect to pay for your delivery. Make sure you ask for estimates for both a vaginal delivery and a C-section. Even if you don’t plan for a C-section, sometimes the unexpected happens, trust me, I know because it happened to me. When possible, figure out what things you can skip and save some money. Also, have a plan to decline unnecessary medical procedures.
Avoid the Hospital Until You’re in Active Labor
I had a baby right when COVID started, and the hospitals were practically locked down. My doctor assessed my labor progress over the phone before even offering for me to come to the hospital. This is the approach you should take before heading to the hospital. Every hospital visit costs money, and it’s important to make sure you’re in active labor before heading in so that you aren’t paying for unnecessary time.
Leave the Hospital When You’re Allowed
You may enjoy having meals brought to your room, and the comfort of someone checking on you and your baby every 3 hours, but keep in mind you’re paying for it. When your medical team decides you can leave, make sure you head home. At 12:01 am, the hospital will automatically charge you for another full day of hospital stay.
Take the Hospital Freebies with You
When you’re ready to head home, take all the hospital freebies home with you. This is so important that I’ve created an entire post telling you what hospital freebies you need to grab.
Verify Maternity Leave (and Paternity Leave)
A couple of months before having my first baby, I sat down with HR and figured out how much time I had off work. Some companies offer fully paid maternity leave, and others make you use your sick/vacation days. Also figure out what paternity leave you can take advantage of as well.
Create a Budget for Maternity Expenses
I can assure you that you’ll need to purchase maternity clothes. Your clothes will only fit for so many months before you need to create your maternity wardrobe. Establish a budget now so you don’t overspend in this category. Plan to purchase some work clothes, comfortable clothes for around the house, likely some new bras because breasts often grow during pregnancy, and maybe one or 2 nicer outfits for events. Keep your maternity clothes simple so you can avoid spending money you don’t have.
Create a Budget for Baby Expenses
This is the fun one no one wants to talk about. Depending on your journey to having a baby, you may want to spend all the money on all the baby things because you’re FINALLY pregnant and having a baby! But, this can be detrimental to your plan of having a baby on a budget. Use the next section to identify your must-have baby essentials, as well as the baby items to skip.
Give breastfeeding a try
I am well aware that breastfeeding isn’t for everyone. BUT, breastfeeding is a great way to eliminate the expense that comes with formula-feeding your baby. I recommend trying breastfeeding in the hospital when there are lactation consultants available who can offer their expertise and give you a true chance at breastfeeding your baby. And, if breastfeeding your baby doesn’t seem like the right fit, you can always pump breast milk and feed your baby that way. Here is my guide for breastfeeding versus pumping, and tips for doing one, the other, or both!
If formula feeding, use the generic brand
A simple way to help lower your formula expense, even if by just a few dollars, is to use the generic brand of formula. There are a lot of generic brands, so shop around a bit and see how much money you can save by switching formula brands.
Accept a Baby Shower if Someone Offers to Host
A great way to extend your baby budget is by accepting a baby shower. Baby showers are a great place to stock up on all the baby necessities, and with any luck, have some of your most expensive baby items gifted to you. Having a baby on a budget feels much more in reach when the people around you give you a great start.
Buy Gently Used Baby Gear or Accept Hand-Me-Downs
I am not a flashy person at all, so accepting hand-me-downs and shopping at second-hand stores was natural to me. However, I understand that isn’t the case for everyone. If you’re used to buying everything new and having only the best, now may be the time to change. You can save a lot of money by taking things people give you and buying gently used baby gear.
Keep a Minimalist Nursery
As I mentioned before, it can be super easy to want all the baby things. But, all of these baby expenses add up, and many of them you won’t use. Creating a minimalist baby nursery is an easy way to make sure you’re only buying what you need and will actually use. If you click that link, those are my recommendations based on my personal experiences.
Having a baby on a budget is attainable. With helpful advice, and the proper time spent planning, you can figure out how to financially prepare to have a baby. Be sure to communicate well with your partner so there are minimal fights about money and financial expectations. Cut out unnecessary expenses for both you and your baby. I hope this guide for preparing finances for a baby has been helpful!
MORE Tips for Preparing for a BABY!
Important Baby Classes for First-Time Parents
How to Plan a Baby Shower on a Budget
Minimalist Baby Registry Must-Haves
Best Baby Travel System for First Time Parents
When to Start Buying Baby Stuff
10 Baby Items You Can Live Without
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