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Budgeting for a Baby: A Bundle of Love

How to Make a Baby Budget

So, you’re having a baby! Your mind has probably been racing since the second that you found out the stork is stopping by—from the best brand of prenatal vitamins to baby names, there’s a lot to think about before the baby is born.

(Spoiler alert: A stork isn’t actually involved with the delivery process at all. I’m not saying your mom was lying, but I also don’t want you to be surprised.)

It seems like life’s to-do list grows exponentially once you find out your own little bundle of joy is on the way, and feeling like a bundle of cash is necessary to finance this having-a-person project only adds to that anxiety.

First of all, breathe. People of all income brackets, ages, abilities, and life stages have babies all of the time—like, constantly, there’s a non-stop supply of new people. You’ll find a way. Having your own little person to love is worth some hustle, I promise.

Second, budget. You knew we were going to say that, didn’t you? Because that is the way.

Budgeting for a baby helps prioritize your wants, needs, and wishes in a more focused and realistic way because the little things can add up fast.

How Much Does a Baby Cost?

It’s hard to say how much you can expect to spend because there are a million variables: what does your health insurance cover? Will one parent stay home or do you need day care? Will you be breastfeeding or bottle feeding? Will you be using cloth diapers or disposable?

Honestly, you can’t even answer some of those questions with certainty until the baby arrives, so some flexible thinking is required here.

And if you’ve already had a baby, everything changes yet again since you have hand-me-downs and are too busy surviving parenthood to obsess over every detail (probably).  

We asked the YNAB team how they did it, and got answers ranging from beautifully-crafted, detailed budgets with a million categories decorated with emojis and cute titles to “I don’t know, I have four kids, I just made a new category called BABY and stuck some money in there” and you know what? Either way works.

For the most accurate accounting, go ahead and create a list of every possible expense you can think of and then organize those costs based on when they’ll be due and in order of what’s negotiable. For example, you absolutely cannot hire a stork to save on delivery fees. However, you can buy used baby gear or learn to live with less.

So, medical expenses should be near the top of the “non-negotiable” list and that $1600 Pottery Barn crib should be way down near the bottom. Way down. Further down than that.

Budgeting for a Baby: Real Examples

We know you already have a lot to think about, so we surveyed the YNAB team for real-life examples of “saving for baby” budgets in order to inspire you. Take a look and see what works for your budgeting style:

For Rachel’s first baby, they set up a new category for all costs related to before the baby was born, and ordered them in order of priority/necessity.

Now that Rachel and her husband are closer to the birth, they set up a separate group for post-birth expenses to live in their budget more long-term.

Erika keeps it simple with a single category for her baby with everything else absorbed into the existing categories (e.g. medical/dental, groceries).

Here’s what Barry’s baby budget looks like, focused on delivery and beyond!

Here’s what Barry’s baby budget looks like, focused on delivery and beyond!

Caitlin had three categories for her first baby:

Caitlin had three categories for her first baby:

They kept baby-related medical expenses separate so they could determine the actual cost of having a baby.

Things were less structured with their second. 🙂

Want to see an example of a real baby budget, numbers and all? See how much it cost for Laura to have a baby.

How to Have a Baby on a Budget

When it comes to being a first-time parent, there are two realities: that starry-eyed, baby powder-scented fantasy land where everything coordinates and looks oh-so-chic while not in use and the largely plastic, cluttered, and garish-colored reality. Guess which one baby brands advertise?

That’s not to say that your baby gear won’t be adorable. This is just a reminder that you’re likely to end up with a lot of it and at some point, you’ll be too busy chasing after a quick crawler to recreate the Land of Nod layout that inspired your nursery. Keep it all in perspective.

It’s easy to spend a lot on new baby stuff, but it’s not always necessary. Consider the following when it comes to saving money in your baby budget:

Expect the Unexpected

Parenthood is unpredictable, at best. You can save a lot of money by not assuming that things are going to go exactly as planned. Just ask any mom who stocked up on precious itty-bitty newborn-sized baby clothes only to birth a baby that started off too big for those outfits. It happens! That beautiful $100 baby-wearing contraption? Your baby might hate it. Your wardrobe of nursing clothes? Might not be necessary. Those cute little Converse shoes? Go ahead and indulge if you must but there’s an excellent chance baby’s just going to kick them off. You just don’t know. Proceed with caution and prepare to pivot.

Try to buy what you need when you need it, whenever possible. I know—that advice is no fun at all. Neither is selling new-with-tags baby gear on Facebook Marketplace.

Some Things in Life Are Free

It may seem counterintuitive as we discuss the many costs associated with having a baby, but there are a surprising number of freebies for new parents. Sign up for coupons and mailing lists for formula, diaper, and baby-related companies, ask nurses and pediatricians for samples, and check to see if your insurance company offers a discount or reimbursement on items like breast pumps.

And don’t forget that people often enjoy purchasing baby gifts, so be mindful when creating your registry. Adding the most important items, like a car seat or crib, along with a few indulgences makes it easier to ensure that the baby’s actual needs are met without breaking the bank or dipping into your emergency fund. Wait to purchase baby gear until after potential gift-giving occasions just in case someone’s planning to do it for you.

Also, think critically about purchases like maternity clothes or diaper bags. Especially for    the first two trimesters, maxi dresses, drawstring shorts, or leggings or joggers with a loose-fitting tee shirt often work well—trust me, the allure of buying maternity clothes will wear off quickly once you actually have to start wearing them regularly. And most backpacks or travel bags can store diapers and baby stuff just as well as a fancy diaper bag and often look cooler anyway.

Used Doesn’t Mean Abused

It’s tempting, and totally normal, to want brand new stuff for your brand new baby. However, in many cases, “used” is practically still new when it comes to baby gear.

Babies end up with so much stuff, or outgrow or reject it so quickly, that many used baby items still look brand new and other tired new parents will often just give it to you or sell it for cheap. Reconsider any preconceived notions you have about hand-me-downs and let friends and acquaintances know that you’d be happy to take any extras off of their hands.

Scour consignment shops or Facebook Marketplace for gently pre-owned gear that was on your wish list and you may end up with nicer items than you could have afforded on your own anyway, with no discernible difference.

Stick that extra cash you saved in a savings account for a trip to Disney in five years or start a college fund; you know, something that a baby can actually appreciate one day.

Start Budgeting for Baby ASAP

Although pregnancy or adoption comes with its own inconveniences, it’s awfully nice of babies to give us some advance notice of their pending arrival. Start your financial nesting as soon as you can. Take a close look at your current, baby-free budget and see which expenses you can cut. Spend more time cooking at home instead of ordering take-out, check out baby-related books from the library instead of buying them from Amazon, and ditch any non-essential streaming services.

Consider cleaning out your closets and storage areas as part of your nesting plan, and sell any items that you no longer need. If you’re up for it, now’s the ideal time to pick up a side gig to stock up some savings to alleviate future financial stress.

If you plan on going from two incomes to one when the baby arrives, start living on one income as much as possible now and setting the rest aside. Future you is going to be so grateful that you thought of these things.

Having a baby is an amazing, exhilarating, (and not gonna lie) slightly terrifying experience that’s well worth the sacrifice, additional responsibility, and new budget categories that come along with it.

Get realistic about your expenses, discover new ways to save, and start preparing for your delightfully squishy new family member so that you can concentrate on the important stuff, like learning the choreography to that Baby Shark song. It’s a must.

Ready to take the next step when it comes to creating a baby budget? Sign up for a 34-day free trial of YNAB.

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Budgeting for a Baby: A Bundle of Love