How To Budget For A New Baby: First Year Checklist

Can we afford to have a baby? I’ve asked myself this question four separate times in my life – I have four beautiful daughters. And now, you are asking yourself the same question. As a new parent, you’re probably wondering how to budget for a new baby?

Preparing for your baby can be overwhelming, especially if you are first-time parents. To help, we’ve created this first year checklist to make sure you have all the newborn baby essentials covered.

In this article we’ll answer – how much does a baby cost per month, how to prepare financially for a new baby, how to make a first year baby budget, and how to save money using a checklist of savings tips for new parents.

There are affiliate links in this post. This means if you make a purchase through one of my links I may earn a small commission, at no cost to you. Read my disclosure policy to learn more.

How Much Does A New Baby Cost?

According to MoneySense, raising a child will set you back around $243,660 from infancy to adulthood!

Let’s just pause and let that sink-in for a moment…

That works out to more than $12,825 a year, if you include everything from swaddling blankets to sparkly heels for prom.

In case you were doing the math in your head, a baby costs on average $1098 per month.

For a complete breakdown of where all that money will go from birth to age 18 see MoneySense’s The Real Cost Of Raising Kids.

But it’s that first year, when parents are managing big-ticket baby expenses on a reduced income, that adds to the overwhelming experience of having a baby.

Debt anxiety and late night teething sessions don’t mix well!

There are tips that can help new parents save money and prepare a practical first year baby budget. With some basic lifestyle changes, new moms and dads can ease money anxieties and just focus on their new arrival.

From getting the most out of government and work benefits, to affording a stroller, here’s everything you need to know to get through that first year of babies life debt-free.

Read: How To Choose Between The 12 And 18 Month Parental Leave

How To Make A Baby Budget For The First Year

Before my first daughter was born, I had no idea what baby items I would need during my pregnancy and post-delivery. Luckily, my sister already had two daughters and was able to guide me through what important items I needed on my new baby checklist.

Fast-forward 9 years, and I’ve since had 3 more daughters. Along the way I’ve learned you can drastically reduce your child expenses and get the best baby products at reduced costs.

Work your way down our parent-friendly checklist to ensure you have all your bases covered before baby arrives on the scene.

Budget For A New Baby: First Year Checklist

1) Write A Baby Shopping List

Once the surprise of that positive pregnancy test sets-in, you may start thinking about all the maternity and baby gear you are going to need.

Creating a shopping list will help to keep you organized and your spending in check. And, if you’re lucky enough to have a friend throw you a baby shower, you’ll be all set to register for the baby goodies you want.

Tip – My in-laws wanted to purchase a crib and change table set for my first daughter. I shared my wish list with my mother-in-law so she knew exactly what baby furniture I liked. Try sharing your checklist with relatives, if they offer to help you out with stocking the nursery.

I’ve created this printable baby budget planner to help parents organize all the baby items they will need. There’s a checklist that itemizes all the clothing and products to have for babies arrival. As well, you’ll get a baby budget spreadsheet to help you keep track of your spending.

Fill out the quick form below and you’ll receive both printable worksheets in your inbox. We don’t spam!

2) Buy Only The Baby Essentials For Your Newborn

Don’t go overboard and purchase every baby item you see online or in the stores. There is a good chance you won’t need or use half of them.

For example, if you plan on breastfeeding, I wouldn’t bother purchasing baby bottles, a bottle warmer, a bottle drying rack, and bottle cleaning brushes, and formula, and… well, you see what I mean!

Tip – If you want to try pumping breastmilk, you can rent a breast-pump instead of buying one, from your local pharmacy.

It is astonishing the amount of baby products available. You really won’t know a lot of what you will need until baby arrives and you have some time to test-out your new lives. It is okay to just wait and see.

I’ve highlighted the must-have baby essentials, I couldn’t have done without when my 4 girls were born, in the printable budget planner mentioned above.

Tip – New babies love to be carried in a baby carrier. The cozy feeling of being nestled close to your body and the rocking movements when you walk often puts a baby to sleep. I lost my baby weight by going for daily walks with my daughters in the baby carrier. Bonus – your hands are free!

You might want to try a baby wrap as well. You can tie the wrap in different ways around your body to keep baby feeling safe and cozy. Using a wrap saved me many times when my newborns were upset and needed calming.

3) Create A Budget For Your Parental Leave

Perhaps you already work with a family budget, or perhaps not. Either way, with one parent about to earn less income, now is the time to make a household budget for babies first year.

This might seem like a daunting task, but it doesn’t have to be. The main goal is to figure out home much income will be coming in and what fixed expenses you have each month.

Research Income Sources During Maternity Leave

1. Government maternity leave benefits – depending upon what country you live in, you may be eligible for maternity and parental leave benefits. For example, In Canada, new parents are eligible for 12 to 18 months of maternity and parental benefits while they stay home to snuggle their newborn babies. In the United States, the federal Family and Medical Leave Act (FMLA) requires employers to provide up to 12 weeks of unpaid leave after the birth of a baby. A few states, including California and New Jersey, offer maternity benefits which partially offset lost income.
2. Employer-Paid Benefits – visit HR and find out if your employer provides any maternity and parental benefits. Some employers offer parental leave top-ups, which can cover up to 100% of the remainder of your salary for a few weeks or for the entire duration of your leave. They might also allow new moms to opt-in to any extended health benefits program and continue paying into your pension while staying home with your new baby.

The Government of Canada has a maternity and parental benefits calculator to give you an estimate of your EI benefit amounts.

Read: How To Choose Between The 12 And 18 Month Parental Leave for an in-depth comparison of the two leave options in Canada.

Once you balance your budget, you will see if there is any money left over to put towards the cost of your new baby.

If your monthly income doesn’t cover your expenses then you’ll need to save-up some money before the baby is born or find a way to bring in extra cash.

Read How To Make A Family Budget for step-by-step instructions and free budget planning tools.

Related Article: How to Stick to a Budget: 12 Doable Tips

4) Tips To Save Money For A New Baby

Start A New Baby Savings Account

Before your baby is born, open a separate savings account for all the newborn items you will need and any emergency expenses.

During the nine months leading up to your delivery, start taking the salary percentage you’ll be losing come parental leave and divide it between debt repayment and savings.

This way, you’ll be getting yourself in better financial shape AND practicing living off the income you will have when your maternity leave begins.

Read: Smart Money Ideas For Women At Every Age

Make Some Extra Money On The Side

If you’re self-employed, or don’t qualify for EI, you can make as much money as you want during your parental leave, without a penalty.

So if you’re not eligible for EI, go ahead and get paid for making sales calls while baby naps in her crib.

Even new parents receiving EI benefits can still make some money on the side so long as the income earned falls below the government threshold. So there’s nothing to prevent you from starting a new part-time freelance business or refurbishing furniture to sell online.

Case in point, I created this website while on maternity leave with my baby daughter.

Scale Back On Long-Term Savings

With less income coming in, you may need to ease up on some of your savings and investment goals. Raising a new baby is wonderful but also perhaps the most expensive stage of your entire life.

So, that may mean waiting a year to start an registered education savings plan for your newborn or reducing the amount you contribute monthly to your retirement savings plan.

Read: Investment Ideas For Low And Middle Income Earners

5) Research Hospital Expenses

The only surprise you want to be leaving the hospital with is your newborn baby and not a hefty hospital bill!

Find out early how much money it will cost you in medical expenses to deliver at a hospital. If you have medical insurance, research if your plan will pay for you to stay in a private or semi-private room.

When my first daughter was born, I spent two nights in a private room. Because it was my first baby, I wanted my husband to be able to stay overnight with us. We had insurance, but were still charged $100 per night in fees.

With my other 3 daughters, I had semi-private room coverage. However, the maternity ward wasn’t crowded so I never had to share my room. The nurses will do their best to provide you with your own space to rest and bond with your baby..

I suggest you go for a tour of the maternity ward if your hospital provides them. My pre-natal class set one up for us. While you are there, ask for a breakdown of all the hospital expenses you can expect postpartum.

6) Buy Used Baby Products

Buying used baby gear used is a great way to save money and protect the environment.

You can shop garage sales, look on buy & sell websites, check-out mom to mom sales, or look in thrift stores.

Babies outgrow their clothing and toys so quickly that you can find used baby stuff that looks practically brand new. I have some baby clothes that my 1-year-old only wore once or twice before she outgrew them.

We also bought a baby glider through kijiji.ca for $100 – much less than the store price.

Read our article, Best Baby Strollers On A Budget, for a list of 6 great strollers for $500 or less.

Tip – Buying A High Quality, Used Stroller – New parents can save a lot of money by purchasing a stroller used. You can search buy & sell websites for families who are reselling their stroller.

For our readers in the United States, The Stroller Store is a buy and sell online platform that helps families find certified pre-owned strollers. On their website you can find UPPAbaby, Nuna, Bugaboo, and other premium strollers for more than 1/2 their original price. The company will provide a safety check, professional cleaning, and 120 day warranty on any stroller you purchase through their store. They also resell Happiest Baby Snoo Bassinets too.

However, there are some baby essentials that you shouldn’t get used.

Infant car seats have a manufacturer expiry date (usually 5 years), after which they are no longer safe to use. Also, if a car seat has been in a vehicle that was involved in an accident, it is unsafe.

If you don’t have plans to have anymore kids, you can resell the same baby clothes and gear when your baby is done with them.

Read: Smart Ways To Save Money On Back To School Expenses

8) Ask For Hand-Me-Downs

I was lucky when I had my first daughter, that my sister had 2 young girls. She was more than willing to pass on all the clothes, toys, and baby products her little ones had outgrown.

Her generosity saved me loads of money on great gear – a baby play-gym, a play mat, a toddler bed, a baby swing, and bins of clothes. Thank you, sis!

Maybe you have a sister or cousin or friend who has kids. I’ll bet they’d be happy to give or lend you any baby items they are no longer using. My sister ended up having more kids so I simply returned her things.

Many moms are too busy to organize reselling all their used baby stuff online and would be glad to empty out their closets, knowing their belongings are going to another child.

Ask around and I bet you can find a mom willing to declutter her house for you .

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7) Shop Online For Essentials

Even after shopping used and asking for hand-me-downs, there were still baby necessities I needed to buy new.

We bought a convertible car seat that adjusts as your child grows. As well, we purchased a baby bouncer, a video baby monitor (very useful for seeing if your baby is actually waking up or just making noises), a new mattress for the crib, and a jogging stroller.

Tip – A stroller is one of the most expensive pieces of baby equipment you will need. If you are an active mom, consider getting a jogging stroller. They are lightweight and very easy to maneuver. I bought a BOB jogging stroller new and it has lasted me through 10 years and 4 kids! I use it for everything from walks in the mall to plowing down snowy sidewalks.

For the baby items that you do buy new, make sure you use a cash-back site, such as Rakuten. They will pay you cash-back on every purchase you make! Shopping through Rakuten means you get paid money for buying items online at stores you already shop at.

Rakuten will give you up to 40% off when you buy through sites like Amazon and Ebay. It’s free to sign up and you’ll get $5 (Canadian residents) to $10 (U.S. residents) when you make your first purchase of $25 or more.

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9) Breastfeed Your Baby

Breastmilk is the best nutrition you can give your newborn. Not only does it feed and protect your baby from illness, but it’s free!

Formula is expensive. Same goes for all the bottles, nipples, and bottle cleaning gadgets you’ll need to keep things sterile.

Some new moms are nervous to try nursing because they’ve heard stories about it being too difficult or painful. It is true that some women have trouble due to issues such as inverted nipples or low milk production, but those situations are rare – and there are solutions.

With your first baby, it takes a few days or weeks to get the swing of breastfeeding. There are nipple creams and nursing pillows to help you out.

Take advantage of the guidance offered by your maternity ward nurse or call your local public health nurse from home. They will make house calls and offer hands-on assistance with nursing.

Breastfeeding is a lovely bonding experience with your baby and makes night-feedings quicker and easier too.

Tip – A friend gave me the book, Dr. Jack Newman’s Guide To Breastfeeding, during my first pregnancy. I never thought I’d ever want to read an entire guide to nursing a baby, but it was extremely helpful about all things breastfeeding – how to get your baby to latch-on properly, sleep & breastfeeding, mom’s diet, understanding how your milk production shifts over time, and more. The best thing I loved about it was how the author is very pro-mom, and makes you feel at ease about following your maternal instincts.

10) Don’t Go Overboard Buying Newborn And Nursing Clothes

Newborn babies grow quickly!

Some are born already too big to fit into newborn clothes.

There are some adorable, little baby onesies and sleepers available, and you probably won’t be able to resist picking out a few cute outfits. However, keep in mind that your new babe will outgrow his/her clothes in a few weeks.

If you are breastfeeding, you’ll definitely need some comfortable nursing bras or nursing tank-tops. I pretty much lived in my nursing tanks for the ten year period I was either pregnant or feeding a baby.

I bought 3 good quality nursing tanks that were comfortable, and they’ve lasted me all this time.

Tip – When you are breastfeeding, your breasts are going to let-down milk while you sleep. You can either place a towel under your body in bed to soak-up the breastmilk or you can sleep in a bra and use nursing pads. I’ve tried both options, and prefer the latter. I ended up buying an inexpensive, comfortable cotton nursing bra ,in a larger size, for nighttime. The nursing pads absorb the wetness so you don’t wake-up in a puddle!

Read: 11 Unique Baby Shower Gifts Under $100

Preparing Financially For A New Baby

Prepping your finances for your new arrival doesn’t have to drain your bank account. It is an expensive moment in your life, but planning and saving money ahead of time can help ease financial stress and allow you to just enjoy your new family member.

Read: Income Tax Changes Canadian Families Need To Know For 2021