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How to Create a Budget for a New Baby


Congratulations, a new baby is on the way! Planning for your new arrival includes determining how much the added expenses for your family will be. Create a budget before you shop, and you'll be able to control the costs of your new baby without breaking the bank. Make your budget for a new baby today.

Difficulty: Average

Time Required: Indefinite

Here's How:

  1. Brainstorm:

    Create a list of all the items you will need to care for your baby. Ask friends who have recently had babies to help you generate your list and determine the essentials.

    An excellent book to help with your list and determine the prices is Baby Bargains (Buy Direct).

  2. New Baby Needs:

    Here are some categories to consider for the first year:
    • Furniture: Crib and/or bassinet with mattress and bedding, glider, dresser and changing table
    • Gear: Car seat, stroller, high chair, baby carrier, monitor, swing, bouncy chair, toys, and books
    • Bathroom accessories: Diapers, wipes, diaper pail, first aid kit, towels, and washcloths
    • For mom: Maternity and nursing clothes, and diaper bag
    • Feeding: Bottles and accessories, pump, formula (if needed), food, and utensils
    • Clothing
  3. Additional Expenses:

    Besides baby gear, you may incur additional costs with becoming a new parent. Consider some of the following for your budget:
    • Child care
    • Additional life insurance for parents
    • Creation of a will
    • Time off from work for unpaid maternity leave
    • Reduced income if one parent will stay home
    • Health insurance to cover birth and care for the child
  4. Research Prices:

    After you have a list made of the baby gear and additional costs, determine how much each item will cost. Add up the costs for a grand total.
  5. Calculate and Reflect:

    Begin working with your total and determine if you can or want to spend that much. Most likely you'll find that you want to trim your list to spend less.
  6. Prioritize and Adjust:

    Determine which items are most important and eliminate the items that are least important. In addition, you may want to borrow, buy second hand, or shop in the off season to prepare for your baby without breaking your budget. Don't forget to consider that new babies often receive gifts. Be sure to register to let your friends and family know what you need the most help with.
  7. Use Your Budget as a Working Plan:

    Once you have your budget balanced, use it as your working plan. Record each expense as you incur it. If you spend more than you planned on one item, be sure to subtract the same amount from another item. If you spend less on an item, either set the money aside for overages elsewhere in your budget or begin saving it for unexpected expenses.
  8. Adjusting the Budget:

    A new baby will bring adjustments and you'll find that you may have overestimated or underestimated some of the costs. Keep updating your budget as you learn about your spending habits.
  9. Beyond the First Year:

    As your child grows, you will want to plan for things you will need beyond the first year. Repeat the process above for future years. You may want to include additional money for food, clothing, and toys as the child grows.
  10. Long Term Planning:

    If you plan on helping your child with college costs, it's never too early to start saving. Make contributions to a college fund each month and the savings will add up by the time the baby heads off to college.
  11. Start Saving:

    Now that you have your expenses and budget in place it is time to start saving. If the baby isn't born yet, start a savings account and earmark the funds for the baby gear and expenses.


  1. Tax deductions and pre-tax plans at work can help offset a portion of childcare costs.
  2. Break the steps into separate days to give yourself enough time to research.
  3. If both parents have health benefits, evaluate which provides better benefits to add the child to.
  4. Children outgrow clothing quickly; avoid buying too many items in one size.

What You Need:

  • Paper and Pen
  • Calculator
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