Expecting? Here’s How to Prepare Your Budget for a Baby

pregnant-1400874_1920Having a child is no doubt a life changing experience. When you become a parent or add a child to your family, it becomes less and less about you and more about what the baby needs and how the whole family will adjust. One of those key adjustments you need to focus on is your budget.

It’s no secret that raising kids is quite expensive. From the time a baby is born, you may need to pay for hospital bills, food, clothing, diapers, gadgets and so on followed by school and child care expenses if you need it. If you are currently expecting or your significant other is, you still have some time to increase your savings and prepare your budget for a baby. Here are a few areas you should focus on.

Increase your Emergency Fund

When you have a child, your monthly expenses will almost always increase so you’ll need to adjust your emergency fund accordingly. Having a small emergency fund is great, but you’ll probably want to set aside even more money as a financial safety net.

Think about how maternity leave can affect your family or if you or your partner have to take an extended leave of absence to stay home with the baby. Try to get your EF to at least 6 months’ of expenses if you can. The more the better.

Pay Down Your Debt

Speaking from experience, I can confirm that being in debt sucks and becomes worse for your situation when you have kids. You may want to pay for certain things for them or start saving up for their college expenses, but if you have debt of your own, you might not be able to do that. Plus, as your expenses increase, you want to try to lower other expenses as much as possible.

Choose a strategy like the avalanche or snowball method and start putting extra money toward your debt before the baby comes. If you can’t pay off all your debt in time don’t worry about it, but even if you can get rid of a few credit card bills, medical debt, and reduce your student loan balance, you’ll be working in the right direction.

Start Purchasing Items You Need Early

If you know you need specific items for your baby like diapers, onesies, bibs, blankets, a thermometer, car seat and so on, start purchasing those items now one at a time and stocking up. If you can spare a few dollars every time you get paid, stock up on diapers each and every month.

If you are an expecting mother, it may also help to have a baby shower which is a fun party where friends and family bring you gifts you need for the baby. In return, you supply food, games, etc. You don’t have to have a lavish baby shower that is over your budget. You can do something small at your home or a family member’s house and let your immediate family pitch in to lower the costs. Decorations can be found at the dollar store and there are plenty of fun baby-themed game ideas online.

Plus, this is a great way to get to see all your loved ones before you deliver and talk about the baby. My baby shower was very fun and extremely helpful in allowing me to gather many items I needed for my son. Thanks to shower gifts, I had tons of clothes and diapers and bathing supplies to last me for six months.

Get Life Insurance

Now that you’re becoming a parent, it’s best to obtain the proper amount of life insurance in order to protect your child financially if anything ever happened to you. No one likes to think about it, but it’s not wise to put obtaining life insurance off especially if you don’t want your family being stuck with a heavy financial burden if you were to pass away.

How much insurance you purchase is up to you, but a good rule of thumb is to purchase a policy that is 7 to 10 times your income. Obtaining a term policy is highly recommended and much cheaper than a whole policy. Once you fill out an application and have an exam completed, you’ll be well on your way to setting up an affordable term policy.

Figure Out Which Expenses You Can Cut

With all this talk of spending and saving extra money in preparation for the birth of your child, it’s important to even things out by cutting some expenses too. If you are already living below your means, that’s great, but if you plan on saving extra and making extra debt payments, that could make your budget pretty tight which may prompt you to want to cut expenses.

If you don’t plan on obtaining a raise or another job anytime soon, it’s crucial that you cut certain expenses. While most people like to upgrade and move to a bigger home when they find out they’re having another child, I encourage you to really crunch the numbers and see if that is financially possible. If it would make your budget extremely tight, I’d advise against it even for the time being.

Try to cut expenses like dining out, purchasing clothes, your t.v. subscriptions, your debt payments (as mentioned above), your phone bill, etc. Also check competing insurance policy rates and consider if you should switch to something more affordable.


If you do anything to adjust your budget, make sure you increase your savings contributions and adopt value-based spending in order to keep your impulse purchases and unnecessary expenses to a minimum. There are actually so many other important and wonderful things to worry about and focus on when you have a baby which is why it’s best to get your finances in order by implementing these tips early on.

What have you done to prepare financially for the birth of a child? Would you add anything to this list?

Posted in: Family

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