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The arrival of a new baby can be exciting and overwhelming, especially considering the cost of raising a child. You have to purchase all the standard baby items – like a car seat, stroller, clothes, and diapers – along with healthcare and possibly childcare costs.

Budgeting for these expenses can help you prepare your finances for this big life change. Here’s how to build a baby budget for less stress and more joy as you grow your family.

Average costs for a baby

Adjusting your budget is key as you prepare for your baby’s arrival. The average cost of raising a baby is around $15,775 in the first year

Your expenses may differ depending on several factors, like your health insurance plan and the cost of childcare in your area. Some of the primary expenses you’ll need to plan for include:

  • Hospital and doctor costs
  • Childcare and babysitting
  • Food and associated costs, like bottles and nursing pillows
  • Diapers
  • Travel equipment like a car seat and a stroller
  • Nursery furniture like a crib and a glider

How do you build a baby budget?

So, how can you build a baby budget that accounts for these new expenses? Here are some steps to take as you consider how to budget for a baby:

  • Identify your financial priorities: With lots of expenses to plan for, take some time to determine your priorities. Saving an emergency fund, for example, might be a top goal so you can cover unexpected expenses. If you have extra room in your budget, you might open a 529 plan for your baby’s future education.
  • Try living on less: Money may get tight after your little one arrives, especially if one or both parents take unpaid maternity or paternity leave or leave their job. Getting accustomed to living on less income before your baby is born may help ease the transition. Plus, you can put the extra money toward a nursery or other essentials.
  • Make a list of monthly child expenses: Your monthly expenses will change as your child grows up and starts school, so you’ll need to adjust your budget along the way. Our budget calculator can help you put your overall spending plan together for your family.
  • Prepare for when there isn’t enough: If you’re struggling to get by, you may have to make some temporary sacrifices to find more room in your budget. Canceling monthly subscriptions, downgrading or selling your car, or cutting other regular costs may help. You might also look into refinancing high-interest debt to save money on interest and lower your monthly payments. Consider possibilities for increasing your income, too, like working on a side hustle.
Ready to put your savings to work? Open a Chime high-yield savings account* to watch your money grow.

One-time baby expenses

If you’re having your first baby, you’ll need to prepare everything from scratch. Here are some one-time expenses to include in your baby budget as you consider how much a baby costs in the first year.

  • Medical bills: Healthcare costs will vary by location, but the average costs of pregnancy, delivery, and postpartum care is $18,865. If you have insurance, you may pay somewhere between $2,600 and $3,200 out-of-pocket.² In some cases, it may be possible to negotiate medical bills.
  • Big items: You’ll shop for plenty of items for your baby, but some big-ticket ones are a stroller, crib, and car seat. Expect a stroller to cost around $120 to $450, a car seat to run $75 to $200, and a crib to cost around $150 to $350.³
  • Home needs: Some other items you’ll need at home include a changing table, dresser, rocking chair, baby monitor, play mat, baby gates, pacifiers, and diaper pail. According to Care.com, you can build out your baby’s nursery for around $2,000, though costs could go higher depending on where you shop.⁴
  • Travel needs: Along with a stroller and car seat, you might need a baby carrier, diaper bag, and portable playpen or bassinet. A carrier may cost between $17 and $70, while a playpen may cost $70 to $150.³ A high-quality diaper bag may cost around $80 to $300.⁵
  • Nursing and feeding: Food costs will vary depending on whether you choose to breastfeed, use formula, or give your baby a mix of both. Nursing supplies may cost $125 to $445 per year.⁶ Eventually, you’ll want to budget for a high chair ($20 to $120).³
  • Adoption costs: Parents who are planning on adopting a child will have to budget for initial adoption costs, which could range from $1,000 to $60,000 or more.⁷ Some organizations and employers offer financial assistance to cover these costs.

Ongoing expenses for baby budgets

Along with one-time costs, you’ll also have to work ongoing expenses into your budget. These will impact how much a newborn costs per month, and they include:

  • Childcare: Childcare may cost around $9,600 per year, according to The Care Index, or $28,350 for an in-home nanny.⁸ If you’re eligible, you may be able to offset costs with tax credits like the child tax credit.
  • Food and other necessities: While food costs may be low initially if you’re breastfeeding, they’ll increase once you start introducing other foods to your baby’s diet. Using formula alone could cost $400 to $800 per month.⁹
  • Clothing: In its most recent Expenditures on Children by Families report, the USDA suggests that new parents will spend around $670 to $1,110 on clothing in their child’s first two years.¹⁰
  • Diapers: The average cost of a diaper is $0.20 to $0.30, and you may spend $500 to $900 on diapers in a year.¹¹ Opting for cloth diapers over disposable ones, however, could reduce costs.
  • Other medical costs: Plan on multiple wellness visits during your baby’s first year, as well as any additional visits for illnesses or immunizations. Your health insurance plan should detail what costs you’ll be responsible for during these visits.

4 best ways to save money for a baby

Saving money can help you get ready for the various one-time and ongoing costs that come with having a baby. Here are some tips for saving up:

  • Shop secondhand: Shopping at consignment and thrift stores can help you get baby essentials at a fraction of the cost of buying new. You might also look for clothing swaps to stock up on baby clothes. Many Facebook groups and online platforms exist to buy gently used baby clothes and items. One exception is a car seat — it’s often better to buy new, since you don’t know if a used one has been compromised.
  • Borrow items: If you have friends or older siblings with young children, ask if you can borrow baby items they’re no longer using. You can recycle and reuse important items, like a crib or rocking chair, while saving money.
  • Rely on family and friends: Childcare is expensive. If you have family or friends who can help with back-up daycare, you can save money and avoid missing paid days at work.
  • Have a baby shower: Create a registry so your guests will purchase the items you genuinely need, and you won’t end up with non-essentials or duplicates of items you already have.

Build your baby budget for peace of mind

Welcoming a baby to your family is a life-changing event. There’s no way to know exactly what to expect until you experience it yourself. Crafting a baby budget, though, can help you prepare for the additional expenses of having a child.

Using a budgeting template to track your income, expenses, and upcoming baby costs can help you prepare financially. Our guide on how to budget has budgeting templates to get you started.

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¹ Information from BabyCenter's First Year Baby Costs Calculator as of March 12, 2024: https://www.babycenter.com/baby-cost-calculator

² Information from Peterson-KFF Health System Tracker's Health costs associated with pregnancy, childbirth, and postpartum care as of March 12, 2024: https://www.healthsystemtracker.org/brief/health-costs-associated-with-pregnancy-childbirth-and-postpartum-care/

³ Information from InCharge Debt Solutions's Budgeting for a Baby as of March 12, 2024: https://www.incharge.org/financial-literacy/budgeting-saving/budgeting-for-a-baby/

⁴ Information from Care.com's What Is the Cost of a Nursery? as of March 18, 2024: https://www.care.com/c/what-is-the-cost-of-a-nursery/

⁵ Information from Parents.com's The Best Diaper Bags Tested by Parents for Comfort, Style, and Emergency Access as of March 18, 2024: https://www.parents.com/best-diaper-bags-7500126

⁶ Information from Parents.com's Nursing Your Child May Be Priceless, But It's Not Without Cost as of March 18, 2024: https://www.parents.com/nursing-your-child-may-be-priceless-but-its-not-without-cost-7480612

⁷ Information from the Child Welfare Information Gateway's Planning for Adoption: Knowing the Costs and Resources as of March 12, 2024: https://cwig-prod-prod-drupal-s3fs-us-east-1.s3.amazonaws.com/public/documents/s_costs.pdf

⁸ Information from Care.com's The Care Index as of March 12, 2024: https://www.care.com/care-index

⁹ Information from BabyCenter's How Much Does It Cost to Have a Baby? as of March 12, 2024: https://www.babycenter.com/family/money/top-baby-costs

¹⁰ Information from the USDA's Expenditures on Children by Families, 2015 as of March 12, 2024: https://fns-prod.azureedge.us/sites/default/files/resource-files/crc2015-march2017.pdf

¹¹ Information from Parents.com's Here's How Many Diapers Your Baby Really Needs as of March 12, 2024: https://www.parents.com/parenting/money/saving/save-money-and-build-a-diaper-stockpile/

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