How To Budget For A New Baby

By Annie Mueller | December 01, 2011 AAA

Trying to determine the cost of starting a family is not an exact science. You can certainly find the average costs of everything from diapers to the total amount of money you can expect to spend on your child from birth to his or her 18th birthday. What's tough about averages is that every family has a different situation. (To learn more, read Budgeting For A New Baby.)

TUTORIAL: Budgeting Basics

You might be going from a dual income status to a single income, or having to add childcare expenses to your regular budget. Or perhaps you have family who will pitch in and take care of those expenses for you. Gear, furniture, clothes and toys can cost a lot when purchased new, but hand-me-downs from friends and family as well as thrifty shopping strategies can help you save, and bring your costs well below average.

Furniture
Fortunately for new parents, babies really don't require many big-ticket items. A crib is good to have, and maybe a changing table and a rocking chair. All of these can be purchased new, of course. A new crib will set you back anywhere from $100 to upwards of $1,000, if you'd like a designer version. Cribs and changing tables often come in matching sets; a mid-line changing table and crib combo will cost you about $300 from a big retailer such as BabiesRUs.com, and a glider or rocker about $150.

You can save on furniture costs by asking for hand-me-downs on cribs and changing tables from friends and family members who have outgrown the need. Just be sure cribs meet current safety standards (Look those up here.). Ask for any of these items as a big-ticket gift from the grandparents, godparents, aunts and uncles and friends. Or ask friends to pitch in to buy your furniture in lieu of giving you clothes, diapers and toys for the baby.

Diapering
If you've started looking up how much diapers cost, then you've encountered the great cloth vs. disposable discussions raging all over the baby-oriented Internet boards. DiaperingDecisions.com estimates the cost of three years' worth of disposable diapers at $2,694.54. Their estimated cost for cloth diapers for three years is much, much less. The initial cost of a cloth diaper set usually runs around $300, and the ongoing cost of laundering the diapers at home is just a couple of dollars a week.

Of course, DiaperingDecisions.com does sell cloth diapers. The site's numbers seem accurate, but you can estimate your own costs by doing some simple price checking and math, or use an online baby cost calculator like BabyCenter.com. (For more, check out Top 5 Ways To Budget For A Baby.)

Formula and Baby Food
Breastfeeding negates the cost of baby formula, though you may find that you need to spend more than you estimated on items like nursing bras (anywhere from $10 to $45 apiece), nursing pads (around $7 a box) and a breast pump (up to $300 for a top-of-the-line motorized pump).

A year's worth of baby formula can cost from about $1,000 to $3,000. You keep it on the low end by buying the generic brand and purchasing with coupons, during sales or in bulk. Baby food prices can run a big range, too, depending on when you start feeding your baby solids, whether you purchase or make your own baby food and what type of baby food you buy (generic versus brand name, organic versus non-organic).

Clothes and Gear
Clothes and gear are where you enter the realm of subjectivity. How many clothes does a baby need, really? And do you even care when you're surrounded by hundreds of tiny little outfits, all of which would look beyond adorable on your infant child? That's the trap, and baby gear pulls us in the same way. It's so cute, and it will be great for baby.

Laura Rowley of DailyFinance.com says that "the biggest early financial pitfall is overspending on complicated baby gear and services that don't add much value." In other words, you can spend just about as much as you want to spend on baby clothes, baby gear, baby toys, baby educational aids, baby music, baby classes and other miscellaneous "baby supplies." It's not that some of them aren't wonderful, it's just that most of them aren't necessary. Your best bet is to talk to a few experienced moms and find out what they think is worth spending money on.

Childcare
Childcare costs can really put a big hole in your budget, especially if you need full-time childcare. Putting your infant in a childcare facility full time will cost about $10,000 annually. If you can find someone providing childcare from home, the cost will drop to about $8,000 annually. Childcare costs add up quickly. If you have willing friends and family members in the area, you can save by enlisting their help.

Additional Family Costs
Things that fit into this "additional" category can range from the minor to the major. For example, you'll need to ensure full coverage on your health insurance plan for baby. When your child is past the baby stage, traveling will mean buying an additional plane ticket. There are lots of little things, from getting photos printed for the grandparents to buying yet another sippy cup, that are easy to overlook in budget planning.

The Bottom Line
New parents have a lot to think about, and their guaranteed lack of sleep for the next, oh, 18 years isn't even in the top five. What is a top concern? Money - or more specifically, the money it will take to take care of that new baby. (Having a child can be a large financial change. For more info, read Top 4 (Financial) Life-Changing Events.)

You May Also Like

Related Articles
  1. Retirement

    Know The Cost of Living Where You Plan ...

  2. Lifestyle inflation occurs when 'you earn more, you spend more', and your spending ends up matching your earnings. Thus, no savings remain.
    Budgeting

    Failing To Build Wealth Despite Making ...

  3. Is your idea of a budget simply spending till your checking account is nearly empty? Or worse, till your credit limit is exhausted?
    Budgeting

    What's Your Idea Of Budgeting?

  4. And is even the least costly burial insurance a good buy? Be sure to compare it against term life or permanent life before you sign up.
    Insurance

    Finding The Cheapest Burial Insurance ...

  5. Savings

    Holiday Savings: A Tip a Day Till Christmas

Trading Center