In the midst of being overwhelmed by baby gear and tiny clothing, it can be easy for new parents-to-be to overlook putting a firm financial plan for their new lifestyle into place. But a budget is a crucial piece of becoming a new parent.
If the idea of financially laying out the first 12 months appears daunting—don’t worry. We’re here to break down everything you need to consider for how to budget for a baby.
Step 1: Establish Your Priorities
If you already use a budget for everyday expenses like groceries and utilities, budgeting for a baby isn’t any different. You just need to start by prioritizing what you want to spend your money on for your infant. For instance, ask yourself questions about handling the basic baby needs, such as:
- Will you be using disposable diapers or cloth?
- Do you plan to breastfeed or formula feed?
- Do you want to start planning for your child’s college tuition?
- Will you need paid childcare?
- What expenses do you need to save for maternity leave (especially if its unpaid)?
On top of basic needs like clothing, food, and baby gear, listing some of your top priorities in your budget first can help you tackle it step-by-step.
Step 2: Pick a Budget Style
There is no one-size-fits-all approach to budgeting, and some families may need to explore different budget styles to find what works best for them. However, if you need a simple budgeting method to start, the 50/30/20 or the 80/20 approach are both popular options.
They work like this: 50% of your budget goes to needs, 30% to wants, and 20% to savings. Alternatively, with the 80/20 approach, you put 20% to savings and 80% to everything else. (This method gives a bit more flexibility but leaves the same amount for savings)
Now, let’s see it in action. Say you have your eye on a $1,000 stroller—you have to consider where it fits in your budget. If it eats up 80% and you still haven’t purchased essentials like clothing and diapers, you need to take a step back and re-visit your financial plan. This is where sticking to the guidelines you’ve set for yourself are critical.
There are easy ways to stay on pace that won’t break the bank. For instance, you could:
- Open a separate baby savings account. That way, you’ll know exactly how much money you have available and won’t be tempted to use it for other expenses.
- Use a budgeting app. There are many free budgeting apps, such as Mint, that use easy-to-follow graphics and send notifications to keep you in the loop about your financial progress.
- Go old–fashioned. There’s nothing wrong with a plain paper-and-pen budget, and some families actually find going “old-fashioned” easier to stick to.
Step 3: Build Your Baby Budget
There are countless baby items to spend money on. As previously mentioned, there are many common costs that are considered essential. It’s really up to you to determine how much of your income is available for baby things. But to help you get started, here are some basics to consider:
- Diapers. If you plan to cloth diaper, keep an eye out for sales in the months leading up to baby’s arrival. Don’t be afraid to check buy and sell pages. Often people sell brand-new or nearly new cloth diapers after they decide to go the disposable route. Planning ahead will save you money in the long run.
- Breastfeeding. If you plan to breastfeed, don’t overlook some of the associated upfront costs. For instance, do you plan to pump a bottle here or there for your partner or another caregiver? Then you’ll need a pump, extra parts, bottles, and of course, milk storage bags for the freezer if you plan to start a stash. Nursing bras and accessible clothing will also make breastfeeding easier, especially outside of your home. And a good, supportive breastfeeding pillow is also an investment.
- Formula feeding. If you use formula, it’s a good idea to wait until after your baby is born before stocking up, so you can be sure the formula meets your baby’s needs and agrees with their stomach.
- Baby gear. Many of the things your little one needs in the first year will be used for only a few short months, so don’t blow your budget on short-term needs. A $15 second-hand jolly jumper will offer the same entertainment as the $50 brand-new one. And if you still have your eye on that $1,000 stroller, but it doesn’t work with your budget, look for it secondhand. You can often get lucky and find one in near perfect condition for a fraction of the price. A good rule is if you can throw it in the washing machine or wipe it down with a Lysol wipe, it’s okay to buy secondhand. (Car seats, however, should never be purchased used, because there is no way of knowing if it has been involved in a collision.)
- Baby clothes. The clothes babies wear in the first year are outgrown so quickly they rarely get worn out, so they’re great items to shop for secondhand or on sale.
- Childcare. If childcare is something you know you will need, research rates in your area early and see how they fit within your budget. A close friend or family member may be another option—think about how this may impact your relationship and if you will be providing meals or financial compensation for the service. Asking Grandma to provide childcare may seem like a low-cost option, but first consider what you are asking. Will Grandma be responsible for meals? Will she be coming into your home every day? Will she follow the guidelines you have set for your child? Selecting appropriate care that works for everyone can be tricky. Make sure you do your research, ask the tough questions, and include it in your budget for baby.
- Hidden costs. There are also other costs that should be taken into consideration as well, such as increased insurance coverage, adding your child to your benefits package, or putting money aside for unexpected medical needs and prescriptions.
Keep in mind that you don’t have to buy absolutely everything you think you will need for your baby ahead of time. If you’re unsure about a baby item, just wait—you can always purchase it later. For instance, I wasn’t sure if I would need a bottle sterilizer, but after a week of boiling everything in a pot on the stove, I sent my husband to pick up a sterilizer that you just pop in the microwave. That microwave sterilizer was one of the best purchases I’ve ever made.
Step 4: Expect the Unexpected
Last but not least, a key part of your baby budget is to plan for unexpected expenses, such as if someone gets sick, if your maternity leave has to start earlier than you planned, and if are not able to go back to work at the time you anticipated.
There are a multitude of unexpected costs that come with raising that bundle of joy, from more laundry and groceries to bigger utility bills, so be sure to set aside funds for the unexpected.
Truly Mama Takeaway
If you’re thinking about adding to your family, it’s a good idea to also start thinking about your financial plans as soon as possible too.
Because the sooner you sit down to make a solid financial plan, the better you will be set up for having a baby—and the faster you can be holding your little one in your arms.
Frequently Asked Questions
How much should you budget for a new baby?
This will depend on many factors, like your lifestyle, what expenses you will need for your baby, and what care you will need. If you don’t have maternity leave, for instance, you’ll need to budget for your own loss of income as well.
How can I afford a baby on a tight budget?
There are many ways to save costs when having a family, from shopping secondhand to utilizing family who can help with childcare for free. How much you spend on a baby also depends on what is important to you–some families may spend more than others.
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