How to Budget for a Baby

Budgeting for baby expenses helps parents prepare for baby’s arrival. This list of expenses and money-saving strategies can help you be financially stronger for your baby.

By Laurel Nelson-Rowe | American Express Credit Intel Freelance Contributor

9 Min Read | May 11, 2020 in Money



This table of baby budget expense items (most with cost ranges) can help you gain the upper hand in managing the short- and long-term cost.

There are many tried-and-true ways to save money on your baby budget. Baby registries, loyalty programs, and online marketplaces are good places to look for savings.

Think long-term, too, as in a college savings.

Babies are beautiful little bundles of joy—that bring big bills. So, young parents tend to worry over questions like how much money they should save before having their baby, but here’s the truth: It. Just. Doesn’t. Matter! When your child squeezes your finger for the first time (and the second time, and the third time, and the …) you’ll forget all about the money.


But the expenses won’t forget about you, so preparing financially for having a baby—building a baby budget—is the smart and responsible thing to do. A bit of good news is that despite the considerable sums that researchers say it costs to have a baby and raise the little tyke to adulthood, the same research shows how those costs rise and fall with your income; just about anyone can “afford” a baby. I’ll touch on those numbers and then share ideas for how to budget for a baby, emphasizing all the (sometimes surprising) things you’ll spend your baby budget on, plus strategies for keeping those costs down.


Breaking Down the Baby Budget Numbers

Raising a child to 18 costs around $233,610 (in 2015 dollars) for the average two-child, middle-income American family, according to comprehensive research from the U.S. Department of Agriculture’s Center for Nutrition Policy and Promotion.1 Take a deep breath and do the math. That’s about $12,350-$13,900 per year (costs vary depending on your baby’s age), or about $1,100 per month. Now, that’s a lot of money, but there are reasons to take heart. For one, the research also shows that what people actually spend is tied to their income: lower income families (defined as household income less than $59,200 per year) spend a lot less, averaging $174,690, or 25% lower than the average for all incomes. And we have yet to factor in cost-saving strategies.


How to Budget for a Baby: Costs Breakdown

Planning in advance and working out a baby budget for the first few years can help smooth your transition into the majestic world of parenting. There will be one-time expenses, such as nursery furniture and strollers; and regularly occurring expenses, for diapers, food, formula, clothing and childcare—all of which is detailed in the accompanying table.


Some baby budget costs may still surprise you. According to my new-mom daughter, trial-and-errors to find the right baby bottle, nipple, and pacifier hit her debit card hard. She advises that a big box discount club annual membership be on everyone’s baby budget, and tells me her go-to baby shower gift for other new moms is a “little baby pharmacy”: digital instant-read thermometer, medicine dispenser, liquid vitamins, liquid fever and pain reducer, teething medicine, healing ointment. A colleague who’s also a young mom suggests a takeout/delivery/convenience food line item be on every baby budget; the sleep deprived still must eat!


When reviewing the long list in the table, remember those baby budget expenses don’t all come at once. It helps to think of them in a timeline: short-, medium-, and long-term. Yes, the baby needs a crib, but in reality, they likely won’t be sleeping in it for the first few months. But that rocking chair, oh, you’re gonna need that ASAP!


Also note that I didn’t attempt to add dollar amounts for college savings, since that will vary so much from family to family. Many families don’t do it. In others, extended family members start college savings or investment accounts to welcome babies. For each new grandchild, my husband and I open education investment funds, with monthly direct deposits, to help assure their future academic opportunities. I found this telling: In a recent poll, 33% of parents surveyed said they regret not starting/contributing to a child’s college savings.2 In addition, the emergency fund is important: 24% of parents in that survey regret not starting/contributing more to an emergency fund. Overall, 57% regretted not taking more financial action in the first year after their baby’s birth.


If it’s feasible in your situation, you may also want to consider some things not in the baby budget table, like sanity-restoring massages, or the double extra tip you’ll feel compelled to give the waitress at the restaurant who crawled on the floor two tables away to pick up the baby bottle and rattle that fell out of your sweet little cherub’s hand!


How to Save on Your Baby Budget

Clearly, your new baby will impact more than just your sleep patterns, waking you up in the wee small hours. But the accompanying baby budget expense table should help you on your way to parenthood and new baby budget proficiency. But there are many savings strategies to help you manage the costs: coupons, rewards programs, bulk discounts, online marketplaces, baby registries, friends, family, and other ways to slim down your out-of-pocket costs.


Baby registries: Baby registries give you—and your family, friends, and co-workers who want to help—a clear picture of what you need or want. They can help groups band together on big-ticket gifts. Consider big-box stores and online marketplaces when creating registries. They ease the work your inner and extended circles have to do when it comes to baby showers and such.


Gently used: Peruse second-hand children’s brick-and-mortar stores and online resale markets such as Facebook, eBay, and others with baby groups. You can find great deals on used furniture and clothing. You’ll find that parents who are “done” having children often sell clothing in bulk at inexpensive prices just to get rid of it quickly. And, just as you search for second-hand stuff, consider preserving the packaging of your first-hand items—there’s a whole reselling world out there for you. You can sell last year’s clothes to help pay for this year’s clothes.


Gender neutral: Choose baby clothing that is durable and not gender specific. It’s more than politically correct; it improves your chances of handing it down to another child.


Loyalty programs: Online and big box retailers offer incentives and loyalty programs. Rack up the rewards points. They add up and come in handy on a regular basis. Track seasonal, flash, or baby-focused sales and discounts (Black Friday is big for kid care and toys).


Newsletters: Most baby-related stores and companies offer discounts to sign up for their newsletters. Load up on those! The 20% off coupons add up, especially when you use them for costly things like furniture. The $60 or so you save on the crib, for example, pays for the bedding.


Trade-offs: Prioritize “must-haves” and “nice-to-haves,” in other words, what you’re willing to buy new, used, borrow, or swap—and at what price, designer to discount, tech-heavy to vintage. Baby monitors can be room-to-room wireless units or whole house video systems. Some cribs convert into a toddler bed or full-size bed. The upfront cost may be more, but when it’s time to move out of the crib, the bed is there already and all you need to do is a buy a new mattress (and maybe sell the old one).


Delivery: Subscription and delivery services are handy for ongoing items such as diapers, wipes, formula, medicines, and groceries. Consider what fits your lifestyle and understand that it can change as the child grows—and you grow more comfortable as a parent.

Breakdown of Baby Budget Expenses*

One-Time Expenses:

Furniture/Nursery items

  • Bassinet ($50-$300)
  • Crib ($100-$1,000+)
  • Mattress and mattress pad ($100-$400)
  • Receiving blankets ($20-$100)
  • Changing table ($90-$200+)
  • Dresser ($400-$750+)
  • Rocking chair ($150-$1400)
  • Nursery decorating/remodeling
  • Diaper can ($30-$50)


  • Breast pump ($14-$250+; some health insurance plans pay for this in full)
  • Bottles ($40+ for a starter set)
  • Milk bags for storing breast milk
  • Breast pads


  • Stroller ($99-$1,400+)
  • Car seat ($90-$500)
  • Extra seat bases for multiple cars ($40-75 each)
  • Baby carrier ($25-$200+)
  • Diaper bag/backpack ($25-$300+)


  • Baby bathtub, toddler bath chair ($25-$60)
  • Baby monitor ($20-$200+)
  • Baby swing ($64-$250)
  • Booster chair ($30-$100)
  • Bouncy chair ($30-$250)
  • Highchair ($60-$400+)
  • Medicine kit
  • Playpen, playmats ($60-$250)
  • Safety gates ($45-180)
  • Trust/will documentation

Monthly/Ongoing Expenses:

  • Babysitters ($10-$40/hour)
  • Baby wipes ($12-$35 for 500 count)
  • Childcare (weekly: from $199 up to $596 for a full-time nanny)3
  • Clothing ($60+/month; varies widely, especially in colder climates)4
  • College education savings plan
  • Diapers ($20-$50 for a box, depending on quantity and diaper size, $15 for a pack of 10 flat fold cloth diapers)5
  • Emergency savings (to cover six months of household expenses)
  • Food, formula ($60/month)6
  • Healthcare insurance
  • Life insurance
  • Medical bills (co-pays, etc.)
  • Toys

*Except where noted, cost ranges were determined by looking up the highest and lowest prices for each item at the website


The Takeaway

The challenge to develop, and the discipline to stick to, a baby budget may not be at the top of your new-parent priorities, yet the majority of parents surveyed regret not having taken financial action earlier in their baby’s life. Building a baby budget may require several of your adult life skills—organization and cooperation among them—as you cope with the changes and coo at the cuteness that your new baby will deliver.

Laurel Nelson-Rowe

Laurel Nelson-Rowe is a longtime writer and editor focusing on business technology, cybersecurity, media, corporate culture, and quality management.


All Credit Intel content is written by freelance authors and commissioned and paid for by American Express. 

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