This post may contain affiliate links, which means that I may earn a commission if you make a purchase using these links at no extra cost to you.
Let me guess…
You want to have a baby. But you don’t have enough money in your bank account. You feel depressed.
You know you would give anything in the world to have a baby, but there are questions nudging at the back of your mind.
How will you buy baby essentials? They are many. There are nursery essentials, breastfeeding essentials, clothing, baby gears, baby diapers, etc.
How will you even cope with healthcare?
The cost is huge!
You are just plain…worried.
How do you overcome this barrier and have your adorable baby in your arms?
You need to plan for it.
Raising a child is an expensive endeavor but a rewarding and invaluable experience you don’t want to trade for anything. It carries a price tag that comes with raising a human being like you. Whether you are a first time mom or an experienced mom, it pays to plan to prepare for a baby financially.
Do you know that it costs about $233,610 to raise a child from birth to age 17 in 2015? A low-income family is required to spend about $174,690 while a high-income family is required to spend about $372,210 to raise the same child.
The costs of raising a child analyzed above does not include pregnancy costs or labor charges or even college fees.
Therefore, you need to be financially prepared for a baby before you make one.
This article will enumerate all you need to know to prepare financially for a baby.
Let’s get started.
How much does a baby cost?
Babies are expensive like we said in the beginning, but they are well worth the cost. Below is a breakdown of the cost of having a baby.
Recurring baby expenses:
These are expenses you will need to do over and over again when your baby is growing.
1. Feeding: If you will use formula feeding, it costs from $50 to $100 per month. This cost is based on the brand of formula your baby consumes.
2. Milk storage bags: If you plan to breastfeed your baby, you will need pumping and storage bags that cost between $15 – $20 for a package of 100 bags.
3. Baby food: Baby food costs between $1 to $1.40 for a jar or pouch of baby food. For solid foods, it costs between $60 t0 $135 per month.
4. Clothing: New baby clothes costs $10 to $15 per outfit. Bodysuits cost $5-$10. Socks are around $1 per pair.
5. Diapers: You are expected to change diapers 10 times a day. If you are using disposable diapers, you will spend $30 worth per month if the price is 10 cents for a diaper or about $90 for 30 centers per diaper. If you plan to use cloth diapers, you will spend between $5 to $10 per cloth diaper.
6. Baby wipes: It costs $1.50 on a pack of wipes for a week.
7. Childcare: This is the most expensive of baby costs. It is about $500 or more per month. This is based on the child’s age, location and childcare setting. Newborn care can go as high as $1000 per month.
Medical expenses: Prepare for medical expenses as newborns can face different health issues when you least expect.
Life insurance premiums: As a first time parent, you will need a life insurance policy that could be as low as $30 per month for $1 million in coverage.
- Cribs: A high-quality crib costs from $150-$400
- Crib mattress: A good crib mattress costs about $50-$100.
- Crib sheets: It goes for less than $20
- Safety gear: It costs about $20
- Bath gear: A bathing tub is around $20 – $30. A washcloth is about $1. The baby towel is about $10.
- Baby grooming kit: A kit contains a brush, comb, nail clipper, nasal aspirator, and thermometer and it cost $10-$20.
- Car seat: It is about $50 – $300
- Strollers: A good stroller costs about $100 – $400.
- Diaper bag: It costs about $20 – $85 per bag.
- Bouncers, swings or rockers: The costs range from $30 to $200 each.
- Portable play yard: It costs about $50 to $250
- High Chair: Costs about $100
- Baby monitor: It is about $40 – $200
- Bassinet: A bassinet is around $50 – $100
- Pacifiers: A couple of dollars each
- Teethers: It costs about $5 to $10
- Toys: It costs from $10 to $50.
Feeding bottles: It costs between $5 and $20 for a pack of three bottles.
Breast pump: Manual breast pump is around $30, electric breast pump costs between $100 and $200.
Baby bibs: A bib is $1.
From the estimate above, you can see that a baby is expensive to cater for. Hence, the need to plan for their arrival.
How much to save for a baby
Many people that are planning to have children often ask – how much to save for a baby? Although, it is good to always plan your finances before you have a child; the truth is you don’t need lots of money saved in your bank account to have a baby. All you need to concern yourself about is the cash flow. You need to know if your income can handle your child’s expenses.
The thing you need to do is to estimate the increase in monthly expenses with the addition of a baby to your family. Add the costs to your spending plan. Even if you don’t have the baby yet, still add the expenses to your monthly expenditures and test drive to see if you can handle it.
If you discover that it is difficult to meet up, then you need to strategically plan for the baby’s arrival.
Pre-baby financial planning
To help you plan for your baby’s arrival, check out the tips below:
1. Open a savings account: Open a savings account to save for your baby. You can ask your family members to also contribute cash as gifts for the baby. Tell them what you need for the baby so they will know how much to contribute.
2. Dispose of things you don’t need to buy things you need: There are many things in your house you bought out of impulse. You don’t really need them. Search for such things and dispose of them. This includes old sports equipment, electronics, and appliances you no longer use. It will help you make room for the baby and also get the cash flow you need for baby things.
3. Save for medical fees: It is expensive to deliver babies in most states in the United States. In fact, the average medical bill to deliver a baby is around $8,775 for a vaginal delivery and $11,525 for a cesarean birth. That is a lot of money. Call your health insurance provider to find out your coverage regarding labor, delivery and hospital care for a newborn. If you don’t have health insurance, start saving towards pregnancy and delivery costs.
4. Cut extra costs: It is time to cut extra costs around the house. This includes entertainment costs, eating out costs, concert event tickets, etc. You need to take a look at your household budget and start cutting unnecessary expenses you can do without. Put a call through to your service providers to see if you can reduce your phone, internet, and cable bills.
5. Use cash for variable expenses: To ensure you have enough money to save up for the baby, start automating your monthly bills and switch to cash for expenses like groceries or entertainment. This will help you not to overspend all your cash until payday.
6. Augment your income: It is not only savings that will help you, but you can also search for ways to earn extra income to boost your revenue.
How to prepare for a baby on a budget
If you are tight on a budget and you want to have a baby, there are ways you can cut the budget down to the barest minimum.
1. Get a baby registry: Set up a baby registry on Amazon, Target, and Buy Buy and add baby items such as a car seat, strollers, and crib and send the link to your family members and friends. They will surely help especially with the big items. This will help you cut down your budget.
2. Health insurance: Some health insurance provider has a list of common out-of-pocket expenses for pregnant moms. So ask to see if the health insurance you are using has something like that. It will help you save for the increased health care expenses when the baby is on the way and when it arrives.
3. Stockpile on diapers and buy ahead of time: Start buying diapers early through a diaper subscription. Amazon has one. You can enroll in it. The truth is, diapers are expensive and you need lots of them especially when the baby is still very young.
4. Register for free baby stuff: There are baby product manufacturers who offer baby things as samples or trials. This includes pampers, feeding bottles, and baby clothing. Sign up for as many as you could to help you cut costs on baby items.
5. Go for second-hand baby gears: If you are on a budget, there is no point stressing yourself to buy what you cannot afford. Look for second-hand baby things to help you save money. Items you can buy for second-hand includes crib, bouncer, strollers, etc. The truth is, baby, grow fast and before you know it, they outgrow the gears. So go for high-quality second-hand baby gears.
6. Purchase baby things after the baby showers: Most often than not, you will get baby things at your baby shower if you plan to have one. Once the shower is over, you will know which items you need to buy. That way, it will save you money on buying things that people will readily give you during the baby shower.
Financial planning for child future
Apart from the immediate things your child will need, you need to also consider planning for its future if you want your baby to turn out well. Use the same energy you used to plan for their birth, delivery, and childcare to plan for their future.
Start a college saving account
Start putting aside some money for the child’s college fees. For this, you can check out a 529 plan. It is similar to the 401 (k). It is an investment account that comes with a tax benefit. It helps you to save more money toward your child’s educational goal.
Invest smartly for your kids
Investment options are important when planning for your child’s future. However, you need to choose the right mix of assets such as equity, debt, and gold. Revisit your portfolio as often as you can as you move towards the financial goal for your child’s future.
Get the right insurance cover for your child
Investing for your child is important, but if you don’t have the right insurance cover for your child, it will be at stake. Insurance protects you against financial loss or uncertainty that includes disability, risk of illness, property damage, etc.
Invest in mutual funds for your child
You can invest in mutual fund schemes using the name of your child. This means you will transact the fund on behalf of your child. However, you don’t have the authority to collect the fund when your child turns 18. The second option is to invest in your name as a parent/guardian on behalf of your child. This will make it easy for you to manage mutual funds.
The truth about having a baby
Babies are expensive. There’s no doubt about that.
But you can make it cheaper by planning for it.
Save some money, sell off things you are not using again, cut down on unnecessary expenditures and augment your income.
Also, look for ways to cut down on the baby budget by using the baby registry, health insurance, buying things in bulk, organizing a baby shower, etc.
With these plans in place, having a baby should be a breeze.
Start planning today.