Budgeting and Saving

Budgeting for a baby: The basics

A new baby is a life-changing event. It’s a time of wonder and amazement. It’s also a period of adjustments that will have a big impact on your finances. While every family has different needs, budgeting for a baby is a crucial step parents-to-be shouldn’t ignore. Although it’s not an exact science, there are ways to keep your finances in order while fully enjoying this new phase of life.

Here’s what to consider as you’re preparing for baby.

Short-term and long-term needs

Before plunging into parenthood, consider everything your little bundle will need. Small things are easy to overlook and can stress your budget over time if you’re not careful.

Make a list of what you’ll need when the baby is born and then think about what you’ll need later. For example, account for ongoing, immediate costs like:

  • Diapers
  • Formula, if needed
  • Clothes
  • Child care
  • Insurance
  • Toiletries
  • Medicine

For long-term costs, consider things like whether you’ll eventually need a bigger house and (even longer-term) a college fund. As your baby grows, your financial obligations will change.

A list of short- and long-term costs will give you a clear picture of where you stand financially and show you how a new family member will affect your budget.

Don’t get carried away

Babies don’t need extravagant clothes or furniture. Resist the urge as a new parent to buy every cute baby item you come into contact with. Babies change so quickly that you’ll use most things for a very short period of time. Consider buying gently used items when possible and commit to not going overboard with your spending.

Assess your resources

Think about ways that you can lessen the financial impact a baby will have on your budget. Can your parents or in-laws help you with child care during the baby’s first few months or after you or your spouse return to work? Will you be regularly buying formula? Can you share carpooling duties with parents of children who will attend the same daycare? How about cloth diapers instead of disposables?

Tapping into your resources is an excellent way to keep costs down, especially for big-ticket items like child care and education. If they’re looking for gift ideas, ask family and friends to contribute to a long-term savings plan for your baby. It’s the perfect way for your loved ones to help you build savings for your child’s future.

Money will always be a top concern for new parents, and starting this journey on solid ground requires forethought and careful planning. Budgeting for a baby is just one of the many steps you’ll take when preparing to welcome your new bundle of joy, but it’s one of the most important.

Did we miss some costs that you’ve considered? Share them in the comments!

Ready to start budgeting for your baby’s arrival? Download SAC FCU’s free monthly budget worksheet to get started.

Kick-start your baby’s long-term savings plan with SAC FCU’s Baby Bundle for new parents.

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Author SAC FCU Managing Editor

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