How to Budget When Having a Baby

May 22, 2013

baby budgetBecoming a parent for the first time is thrilling and terrifying on several fronts, not the least of which is budgeting. You know having a baby is going to cost you dearly in the wallet, but how much? Should you set aside $50 per month for diapers and other regular expenses? Should you anticipate dropping $10,000 on setting up the nursery for the new addition? The answer for most people will fall somewhere in the middle. Exactly how much you need to spend on having a baby depends on your needs, wants, and how much wiggle room you have in your budget.

How to Budget for a Baby

Budgeting for a baby can seem overwhelming, but it doesn’t have to be. The key is to differentiate what is a need versus what is a want.

Determine Baby Needs

As much money as you could spend on all the cute, cuddly items at every baby store in the world a majority of those things are not necessities. Just like you need a core set of things to live – food, water, shelter, and so on – your baby has a set of core needs as well. Addressing those needs is your primary concern first. If you have a limited budget you shouldn’t be splurging on all the cuteness available without taking care of needs first.

Here are some common needs:

  • Furniture:
    • Crib and mattress – a place to sleep.
    • Changing table – a place to change diapers.
  • Food:
    • Breast feeding supplies (breast pump, bottles, and so on) or formula supplies.
    • Bibs.
  • Diapering:
    • Diapers (disposable or cloth).
    • Wipes.
    • Diaper rash cream.
  • Clothing:
    • Onesies.
    • Shirts.
    • Leggings/pants.
    • Pajamas/sleepers.
    • Socks.
    • Hats (for blocking sun in summer or keeping head warm in winter).
  • Transportation:
    • Car seats that have been installed and checked by a professional (fire department, police officer, etc.).
    • Stroller.
    • Baby carrier.
  • Safety:
    • Outlet covers.
    • Locks for doors with household chemicals and other risky products.
    • Baby gate for homes with stairs or to block access to certain rooms.

This covers a big chunk of what you need as a parent. From there you determine how expensive you want each item to be. Know that there are affordable options for every single item on this list. The clothing doesn’t have to be cute to be effective; plain white clothing gets spit up on just as easily as cute puppy dog clothing. Likewise you don’t need 600 of every single item. Sure, having an extra pack of onesies would be great to help reduce on constantly doing laundry, but the world won’t end if you don’t have it.

Determine Baby Wants

Once you have covered all of the absolute needs of your child, you can consider wants. There are two types of wants when shopping for your baby:

  • Things that are not necessities on the list above, but you want to have them.
  • Things that are necessities on the list above, but you want the better/cuter/more expensive version.

For example, under furniture you could list a rocking chair or glider as a need. Technically it isn’t a need, but I’m sure nursing mothers everywhere would disagree. Even if it were on the need list the amount of money you can spend on this simple piece of furniture is astounding.

You can go to one of the big box baby stores and spend $600, $700, or $800 on a glider. (I know because my wife and I are expecting and just went through looking for one!) I was stunned. You can get a really nice leather recliner for that much money not to mention a pretty basic piece of wood furniture with some padding.

On the other hand you can go to a big box retailer like Wal-Mart and get a similar glider for $120. Is the Wal-Mart glider not as effective as the $750 baby retailer glider? Maybe, I don’t know. It is hard to quantify. If it is, is it $600 (or more) less effective? Doubtful.

Therein lies the problem with baby shopping. You can get the basic item, but then you see everyone else running around with the better, cuter, and more expensive version. You can get a 5-pack of plain white onesies for $10 at the big box retailer. That’s $2 per onesie. Or you can go on Etsy and get something custom made for $15 or $30 per onesie. The former is a need; the latter is a want.

As long as you have covered all of the needs and are comfortable spending more money on the want side of things, feel free. But don’t confuse wants for needs. The basic items will do if they have to.

Talk to Friends with Babies

The best sources of information as to what to expect, what to buy, and how much it is all going to cost you are your friends that have had babies recently. They’ll tell you whether or not a specific item (or “better” version of an item) is worth the premium or not. They can give you estimates as to what they spent, and how much they spend each month on regular items like diapers.

Just keep in mind: Your friends may not raise children the way you want to. They may be the big spenders that wanted the best name brand of every single item. On the other hand they may have been scrimping by just trying to make it.

Nonetheless getting some firsthand experience on what they spent can help you budget for your baby. Talking to real people that have been through what you are about to experience is a lot more beneficial than the baby registry place handing you a conveniently jam-packed reminder list. (They want you to register for everything on the list to make more money, not to necessarily make your life easier.)

Err on the Side of Caution

When budgeting for anything – a home down payment, a vacation, buying your next vehicle, etc. – having more money set aside than you need is a lot better than coming up short. The same is true when budgeting for your baby.

Come up with a list of one-time purchases (like furniture) and a separate list of monthly needs (like diapers). Estimate what you think these items are going to cost you. If you want you can come up with different levels of spending: the basic item that is just fine, or the nicer version that if you have extra money you would splurge on.

The key is to cover the one time purchases either on your own, through your registry and family help, or some combination of the two. The ongoing costs are what can surprise you. Make sure you do the math on exactly how many diapers a child goes through as they age, and figure out what that is going to cost you every month.

Make sure to build in a buffer on top of your budgeted cost to account for things you didn’t think of. Adding 10% or 20% should cover you. If you end up spending less you can just save the money for the future . . . or pay for a babysitter to go on that rare date as a couple.

Are you a parent? How did you budget for your baby? Leave a comment!


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Kevin Mulligan is a debt reduction champion with a passion for teaching people how to budget and stay out of debt. He's building a personal finance freelance writing career and has written for, Discover Bank, ING Direct, and many others.

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2 Responses to How to Budget When Having a Baby

  • Kelly

    I’ve heard that a lot of purchases that you make online can be cheaper if you shop at sale department or use coupon codes. There are a lot of such offers on the web. I think you should pay attention to them because they can greatly save your money. As for me I usually use coupons when I need to buy something for my children. Hope my advise will help you!

  • Free Money Minute

    We are expecting baby number 3 soon. I think they are cheaper by the dozen, however, they are still expensive. They are well worth the expense, however.