You should be full of joy and excitement when you are about to become a parent. However, a little bit of panic is also normal, especially when you think about the baby budget. Before you think about ways to tackle money matters and baby budget, you should also keep in mind that becoming a parent will make you prioritize changing goals and practice living on less.
Keep on reading to learn how to build a budget for a new baby.
Budgeting for a Baby
It is exciting and joyful to have a baby but it’s also extremely expensive. You need to prepare your budget for a new baby and the costs can be rather high. It’s essential to prioritize your expenses and plan your spending categories.
While your costs will definitely change when you have a child, your budgeting approach may remain the same. You should also stretch your income to cover your spending, debt payoff, as well as savings. Many parents-to-be also learn how to borrow money from cash app when they can’t make the ends meet. It may be a suitable short-term option if you suddenly need to fulfil a cash need on the go.
Are you new to budgeting and what to find the best strategy? We advise you to stick to the 50/30/20 approach:
- 50% of your income goes to household bills, necessary expenses including diapers, child care, as well as minimum loan payments.
- 30% of your income goes to financial wants.
- 20% for a credit card or payday loan repayment as well as savings.
How Much Does It Cost to have a Baby?

Raising a baby to the age of 18 will cost you $233,610, according to InCharge.org ad the United States Department of Agriculture (USDA). This is $33,610 more than the average cost of a house ($200,000) in the USA. It can be really challenging to give your children everything without going into debt. Speaking of childbirth, the U.S. is the most expensive developed country. The median delivery costs over $11,000. The average C-section is about $15,000.
The price of giving birth depends on your insurance and location. The median cost of delivery for insured women was $4,500, according to a Health Affairs study. The data from Health Care Cost Institute was used to better understand spending on childbirth among the commercially insured in the USA. The cost of childbirth varies widely across the country ranging from $8,361 in Arkansas to $19,771 in New York.
How to Build a Budget for New Baby

#1 Define Your Financial Priorities
Some parents-to-be are thinking about ways to save for their kid’s education, while there are more urgent duties. The cost of your present financial security should come first. It will be possible to borrow funds for college or university but there are more pressing needs. When you have a certain sum of emergency cash to finance unpredicted costs – say $500 – you should set your current monetary priorities:
- Debt payments. Repay your current debt as it may hurt you. For instance, if you have title loans, payday loans, or multiple credit cards, you should pay them off as soon as possible as this toxic debt may have expensive daily charges and prevent you from concentrating on important financial priorities.
- Retirement savings. You also need to focus on your future and ensure you set aside enough funds for your comfortable retirement. Use an online retirement calculator and save about 15% of your income.
- Emergency fund. Besides, you should contribute to your emergency fund as this is the safety net that will protect you in case of an emergency and cover your expenses for several months.
#2 Try Living on Less
The parents’ income will change after they have a baby. One parent may take some unpaid paternity or maternity leave, or even quit work completely. You need to practice living on a lower household income before your due date. It would be great to save more cash in advance so that you feel more secure and prepared. Later, some adjustments to a small budget will be necessary as more child care expenses will occur.
#3 Health Care
When you are planning to have a baby, you should select the benefits of your health care plan. A health maintenance organization may lower out-of-pocket costs over a traditional plan, which usually demands you to pay a minimum 20% of care expenses. It may be important to have enough savings for families with small children.
If you want to get additional help with costs not covered by your health insurance, you may want to find other companies offering a health savings account (HSA) or a medical reimbursement account (MRA). The person’s contributions may cover insurance deductibles, orthodontic care, and eyeglasses.
#4 Legacy Planning
Have you already thought about a will appointing a guardian for your kid in case you and your spouse pass away? If you don’t have a will, a judge will designate a guardian for your child. This way, you won’t be able to know who it will be as the guardian may be any person. If you want to choose this person yourself and ensure you know who would be your kid’s guardian, it’s necessary to create a will that applies to both your present and future children.
#5 Prepare for Financial Difficulties
You need to prepare for situations when you won’t have enough funds for everything. Even if you boost your family income and lower current expenses, it may still be not enough to balance your new budget with a baby. If you want to eliminate potential struggles with your finances, you may want to ask for a raise or land a better-paying job, find alternative ways to earn money, refinance your mortgage, and erase unnecessary monthly subscriptions.
The Bottom Line
It is really expensive to raise a child these days. You need to prepare for this new exciting chapter of your life and adjust your budget. Follow these steps to build your budget for the new baby and protect your finances.
Also read: Retirement and Healthcare Facilities – What are Your Options?