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Preparing Financially For A New Baby

15 March 2010 14 Comments

One of the biggest “life events” many of us experience during our 20s (or 30s) is the arrival of a new member of the family.  A new baby can bring a great deal of excitement and responsibility.  The great thing about a new baby is that you have about 9 months to prepare for him or her.  Your financial preperations are very important.  Here’s what I’ve learned going through the process.

There are a number of expenses that come with a new baby.  Some of the major ones are:

  • Medical expenses with repeated doctor visits as well as costs of the birth / hospital stay – Estimate $750 – $2,000
  • Setting up a nursery can vary big time depending on how overboard you go, but most people will buy the basics such as a crib, rocking chair, and some other basics – Estimate: $300 – $1,500
  • Clothes and other baby essentials such as bottles, diapers, changing pads, blankets, etc. – Estimate: $300 – $500
  • Safety items such as strollers and car seats can also get expensive and might not be items you want to skimp on – Estimate: $200 – $800

Additionally, you can count on an increase in your monthly spending.  Items such as diapers, formula and clothes will need to be continually purchased since they’re being consumed or out-grown. I estimate between $200 and $300 a month on the day-to-day needs of a baby.

The wonderful thing is that some of the upfront costs might be saved due to the generosity of family and friends during this exciting time.  Events like baby showers sometimes end up being generous gift giving events where you get many of the items you will need.

I’ve definitely left out many items in the above list, but it’s a pretty good starting point.  I suggest estimating out the total costs of a new baby along with 3-6 months of anticipated day-to-day costs.  Total that number up and start putting money away during the pregnancy to attempt to reach that number.  There are plenty of new stresses with a new baby ( especially if it’s your first baby) so do your best to eliminate the uncertainty over the financial aspect of this process.

If this isn’t your first baby, then you likely have many of the major items that you purchased for your first baby.  While this will help for some of the up-front costs, you will still need to buy the day-to-day stuff for a new baby (in addition to your other children’s needs).  Multiple kids can definitely add up!

If you’ve gone through this process, what are some tips you would share with a soon-to-be parent?


  • Ted @broketofree said:

    If you have substandard insurance, the cost of all the doctor's visits and birth can climb up to 12 grand (It did for us). Other than, that I feel like the breakdown was spot on for us. Also, if you went out a lot before having the baby, you can expect some of those expenses to go down.

  • Mrs. Frugal said:

    I'm due in May so we're going through this right now. We've almost got our nursery furnished and we've spent less than $100 at this point. A couple tips:

    1. Frequent Craigslist – There are great deals to be found on gently used items. We got our crib and mattress for $60. If we bought new we would have spent about $400.
    2. Talk to parents to determine what you really need. Babies are big business and you'll be tempted to buy all kinds of things that will never get used. Find out what those must have items are.
    3. If you know anyone with a baby, find out if they have hand me downs they want to part with. My niece has given us about a years worth of clothing as well as a car seat, stroller, co-sleeper and the list goes on. She has saved us $$$$!
    4. Breastfeeding and making your won baby food will save $$$.

    I feel pretty good about how we've kept our costs down. Now if the little guy would remove his foot from my ribcage life would be great!

  • 20smoney said:

    Awesome job! Craigslist is awesome for baby stuff… even diapers.

  • Jimmy said:

    When i had my first child it was also when is started to get serious about my financial health. I would add purchasing life insurance and getting a will to the list of todo's that are often over looked.

  • 20smoney said:

    Absolutely. we actually did life insurance for my wife when we had a baby, already had a term policy on myself.

  • Felix said:

    I'm a proud father of a 10-month old. I found that having a baby is much less expensive than people make it out to be. First, if this is your first baby, you will soon find out that you have lost the luxury of eating out (often). Believe it or not, this will save you tons of money. Second, i totally agree with the comment on Craigslist…it's awesome. I get toys and strollers, etc. at more than half price and in good condition! Third, it's always good to be able to get some hand-me-downs from your extended family and friends. Don't be shy to ask…most people would absolutely be thrilled that the onesie that their baby wore twice can be of value again!

  • Money Beagle said:

    For monthly spending increases, also factor in possible changes to your health insurance, if it's your first kid. To go from a plan covering my wife and I to a family plan cost an extra $100 or so out of pocket every month.

  • Money Infant said:

    We are also due in May (congrats to you Mrs. Frugal!). At this point we have the basic necessities for bringing the baby home…crib, car seats, some diapers and clothes. The baby shower is upcoming and we'll see how that pans out. We have also been offered loads of clothes from family and friends. At this point our total outlay is a whopping $40! Obviously that will increase once the baby is born, but considering that my wife is planning on breast feeding I can't see us spending more than a couple hundred a month on diapers and fun purchases for the baby.

  • 20smoney said:

    You definitely won't spend more than a couple hundred if you go the breast feeding route. Once we started supplementing formula around the 10 month mark, our expenses went up to about $200 / mo on average. We buy diapers and formula from Sams Club. Also check out craigslist for diapers.

  • finance_today said:

    I don't think mothers in old days had so much work to do, so, no offence to those who say that diapers are worthless, I really enjoy the modern days…

  • Allison said:

    Cloth diapering. I am reusing the diapers from my older child on my second one. I launder them myself and hang dry. I save a ton! I do have to use some disposables for travel or when sitters are here but I still save a lot.

  • Aidan Montacute said:

    I definitely agree, every parent should do everything they can to prepare for their children’s future. As you experienced, you never know what life will throw at you, and it’s always best to think ahead. Peace of mind is priceless.

  • Wendy Fair said:

    This is a very interesting article.I am pregnant and I've already spent a lot of money on the nursery room.I bought everything from diapers to baby pettiskirts and I still have to buy some items such as a stroller.