You’re about to add a new bundle of joy to your family. Naturally, the excitement is everywhere, but before the big day comes, you should create a baby budget. Knowing how much a baby may cost you and how you can best save/budget for it will make the transition to parenthood much easier.
In this article, we'll discuss what to include in your baby budget, as well as how to start a baby budget worksheet or baby budget spreadsheet.
Reasons why a baby budget is necessary
A baby budget is important because your expenses will increase rapidly in the first year, not to mention the next 17 years of your child’s life. Just like any expense in life, you want to be best prepared and not caught off guard.
A baby budget helps prepare for all relevant costs
You can prepare for having a child’s expected and even unexpected costs when you have a baby budget. No two children have the same needs when they come into this world. You want to be prepared for what you know they’ll need (food, clothing, blankets, bedding, stroller, etc.).
It’s also important to have money available for the unexpected occurrences that come up, such as medical bills, special dietary needs, or special therapies or services needed.
You can balance income vs. costs with a custom baby budget
As is the case with any expense, you should always balance your income with your costs. You shouldn’t spend every penny as you’ll always need money for an emergency or unexpected costs.
When you balance your income versus your costs, you’ll know where you can spend, where you should cut back, and how you’ll allocate the costs, you’ll incur when you bring a baby into your family.
How to create a baby budget with sample costs
If you need a little help setting up your baby budget, we created an example with sample costs to help! Here is an example of how you can set up your baby budget spreadsheet:
|Diapers||$70 - $80|
|Wipes||$20 - $30|
|Formula/Food||$150 - $200|
|Clothing||$50 - $100|
|Insurance||$400 - $600|
|Prescriptions||$50 - $100|
|Childcare||$1,100 - $1,500|
|College savings||Based on what you can afford|
|Monthly total||~ $1920 - $2785|
|Annual total||~ $23,040 - $33,720|
Newborn babies can go through as many as 12 diapers a day. Each baby will differ, and some days will be better than others, but it’s better to be safe than sorry. Buying your diapers online or at a wholesale store may help cut the costs down a bit.
Wipes will become your best friend when you have a baby. You’ll use them for the obvious reasons when changing diapers, but they’re also great for sanitizing carts or high chairs before putting your baby in them, wiping up spills, or cleaning your baby off after feeding.
You’ll quickly wonder where all the laundry comes from when you have a baby. Suddenly, it’s as if your laundry piles quadruple.
Since babies can go through several outfits a day between spit-ups and diaper accidents, you’ll go through a lot more detergent and water than ever before. So, try to find coupons and buy in bulk to save some money and stretch your baby budget further.
If you decide not to breastfeed (or can’t), you’ll need to supply your baby with adequate formula. Some babies can eat just about any formula and feel good, while others need a special diet.
Specialized formulas cost more than traditional options, so it’s always best to err on the higher side to make sure you have enough in your budget for what your baby needs.
It may surprise you that something so tiny can go through so many clothes. Babies grow so fast that you’ll likely be replacing an entire wardrobe every few months in the first year. Fortunately, their growth slows down when they hit the 12-month mark, but you’ll still find yourself buying more clothes for your baby than yourself for a while.
If you have friends or family with slightly older children, don’t be ashamed to accept hand-me-downs, or consider shopping at second-hand stores to get through the periods where your baby literally grows like a weed. Finding ways to be frugal will help you save so much more money!
Not only will you be cleaning your baby up, but you’ll also find yourself cleaning a lot more when your baby is around. You’ll want all surfaces and even the air completely sanitized to keep your baby healthy.
Keeping a healthy stock of cleaning supplies will help you do just that. Stocking up on cleaning supplies when they’re on sale or at wholesale stores is a great way to save money.
Your baby is automatically added to your health insurance upon birth, which also means higher insurance premiums. If you have insurance through your employer, it may not increase too much, but if you’re self-insured through the marketplace, it can rise.
You or your baby may need prescriptions after the birth. Since there’s no way to predict who will need what, it’s always best to prepare.
If you need prescriptions, ask the doctor about generic options or ask the pharmacist to look for discount cards to save you money on your prescriptions. Check out GoodRx to cut prescription costs significantly!
Child care can put a big dent in your baby budget. But you can’t put a price on the cost of placing your newborn in the care of someone else, but if you’ll go back to work, it’s necessary.
Unfortunately, child care in the United States is very expensive, taking an average of 10% of a family’s income, so it’s a large expense to make sure you budget carefully.
You can’t predict if/when emergencies will happen, but you can prepare for them financially. The average emergency room visit without insurance costs $2,200!
Even with insurance, you will have to pay some sort of co-pay or deductible. So your out-of-pocket costs depend on how much your insurance will cover. Contact your insurance company to find out the cost so you can prepare financially should you need it.
Increased utility bills
Bringing a baby home means using a lot more of everything, including electricity, water, and gas. You want to keep the house warm enough, give your baby plenty of baths, wash the baby’s bottles and dishes often, do a lot of laundry, and of course, you need light to see your baby even in the middle of the night.
College/Continuing education funds
It is never too early to think about saving for college. The earlier you save, the more money your child will have when they are ready to go to college. It may seem far off now and ridiculous to think about, but it will be here before you know it.
Consider setting up a 529 Savings Plan now and sharing it with friends and family. As a result, anyone can contribute to your baby’s college fund over time. The funds grow tax-free, and if you use the money for qualified education expenses, you don’t incur a tax liability.
Other costs to consider
When you welcome a new baby into your family, there are also some other costs to consider.
Your income may or may not change when you have a baby. If both spouses worked before the baby was born and now one will stay home, you must account for the changes. If you didn’t save enough money beforehand, you must change up your budget so your expenses don’t exceed the money you bring in.
Upsizing your living space
If you don’t think your current home has enough room, you may want to upsize. Whether you do it now or you wait, keep in mind that your mortgage payment, utilities, taxes, and insurance charges will all increase.
Think carefully about the changes before upsizing and consider staying put for a year or two until the ‘major’ baby expenses are paid. Also, be sure to save up a good size downpayment for your next home!
Baby budget spreadsheet examples
Sometimes we need a template to get us started on our baby budget. So we gathered up a few fantastic baby budget worksheets to try!
Policy Genius baby budget spreadsheet
The Policy Genius baby budget spreadsheet is a spreadsheet that includes all costs for your entire family and baby, so you can budget accordingly and not find yourself struggling to keep up.
Blunders in Babyland baby budget spreadsheet
The Blunders in Babyland baby budget spreadsheet will help you plan out all monthly expenses and how to save more money! Everything is broken down and explained in a simple format. It also had a section to track your actual spending compared to what you budgeted for.
The Mamma's List baby budget worksheet
The Mamma's List baby budget worksheet includes a worksheet and template to better prepare financially for your new little one. It helps you create a plan that also includes your maternity leave before your baby arrives. A great feature provided is a baby registry list so you can plan out what you might need to include in your baby budget worksheet.
7 Tips for saving money with your baby budget
Don’t let sticker shock scare you. Fortunately, there are ways to save money on your baby budget if you think outside the box, including the following.
1. Avoid name brands
We all want to ooh and aah over the cute, tiny baby clothes and shoes, like mini Uggs or Jordans, for example. But they aren’t necessary. First, your baby doesn’t know the difference to appreciate them, and second, your baby will likely wear them once or twice before outgrowing them.
Instead, save your money and buy the less expensive brands that do just as good of a job as the more expensive versions.
2. Buy second hand to maximize your baby budget
You can find second-hand baby stores both online and in-store, making it easy to stick to your baby budget. Bonus points if you keep your baby clothes in good enough condition to sell back to consignment stores and make a little money. Check out sites like ThredUp and Poshmark!
3. Create a registry
Don’t be afraid to create a baby registry if you have a baby shower. Let your loved ones shower your baby with all the things they will need. Think of it as gifts for yourself and helping you stick to your budget, though. This way, you’ll get what you need versus the ‘cute’ gifts that are a novelty and won’t save you money.
4. Ask for samples from a Pediatrician
If you’re having trouble with formulas or you have to put your baby on medication, ask the pediatrician for samples. In fact, you may be surprised at how many samples they have available to give to patients.
It’s a marketing expense for the pharmaceutical company in the hopes of getting more people to buy their products, but it also saves you money.
5. Borrow from friends and family to stretch your baby budget
If you have friends or family who had babies recently, ask to borrow the big stuff, like cribs, playpens, swings, and strollers. If you have a one-time need for oversized items, don’t spend the money on them, but borrow them instead.
Most people are happy to share their baby gear since we all understand it can be a struggle sometimes financially. Babies grow so fast there’s no reason to waste the money.
6. Buy quality vs. quantity
Focus on spending your hard-earned dollars on quality versus quantity. For example, it makes more sense to invest in a high-quality stroller that you can use everywhere versus buying multiple strollers for different occasions. Even if you can get the other strollers cheaper, you’ll spend more money overall if you buy multiples.
7. Invest in reusable items
It may cost more money initially, but when you buy reusable items, you save money in the long run because you won’t have to replace them. Avoid anything with the word ‘disposable’ in it and instead buy the reusable versions, including bottles, bibs, tableware, sippy cups, and possibly even diapers.
Financially prepare with a new baby budget!
The key is to financially prepare yourself for a baby with a new baby budget. Knowing ahead of time approximately how much it may cost to have a baby can help you save and be prepared when the big day arrives.
While no one can predict 100% the costs they’ll incur, the more prepared you are for your baby’s arrival, the more time you can spend enjoying your new bundle of joy versus stressing about money.
Learn how to save even more money with our completely free "savings challenge bundle!" It includes a meal-planning challenge, the $5 savings challenge, and more! Also, tune in to the Clever Girls Know podcast and YouTube channel for more great financial tips.