Build Your Baby Budget

Welcoming a child into the family is a beautifully momentous and anxiety-inducing event for every new parent—you want to feel prepared for all the changes coming your way. And while you can’t prepare for everything (spills and sleepless nights are just part of the baby roadmap) you can create a financial plan that will help you transition to this exciting new chapter. And that’s where we come in!

It’s important to build a baby budget to accommodate new expenses, and we’ve got some suggestions on how to do that without breaking the bank.

To start building your baby budget, you’ll need to take inventory of your current finances and determine how much you can afford to spend on baby-related expenses. Our partners at BECU offer a useful list of the expenses you can expect during baby’s first year. These include medical costs, such as postnatal care and routine visits, and ongoing expenses such as diapers, nursery supplies, clothing, and childcare.

Depending on your current situation, you may also need to consider larger expenses like a new car that comfortably accommodates your expanded family. Create a spreadsheet (or use a budgeting app) that lists these various costs and compare that to your current income, expenses, and any debt you’re paying downany debt you’re paying down. This will give you a realistic overall financial picture before you start spending.

When it comes to managing your expenses, there are a few strategies that can help you save money on baby-related items. For example, consider buying items like clothes and toys at your local consignment stores, as these can often be found in good condition at a fraction of the cost of new items.

You can also sign up for free exchange apps like Offer Up or Facebook parenting groups in your neighborhood where other parents are posting items at a deep discount. Is there someone in your family or friend circle who kept a box of baby clothes? Consider asking for some of their hand-me-downs.

Once you have a clear picture of your finances, you can begin to allocate funds to your baby budget. Start by prioritizing your expenses based on their importance and necessity. For example, you may want to prioritize medical expenses and childcare. Saving on clothes and toys, in the ways above, can help you make sure there are enough funds set aside for medical expenses and other unexpected necessities. Free budgeting apps can help keep your spending categories visually organized so that you’re able to see where you might be overspending.

Parenthood can feel doubly overwhelming when you’re faced with a trip to the ER, job lossjob loss, or an unforeseen event. It’s important to have an emergency fund in place that can relieve some of the financial burden. If you don’t have a fund yet (or only have a small amount set aside) you’re not alone. More than half of Americans are in the same boat. An automatic deposit that funnels a small percentage of your earnings to an emergency fund–even if it’s $25-$50 a week–is a start, and you can consider increasing that percentage once baby arrives.