9 Tips on Planning for a Baby Financially

Team Peanut
Team Peanutover 1 year ago5 min read

So, you’re planning for a baby? Exciting! Or maybe you already have a little one on the way? Either way, you now want to start thinking about planning for a baby financially.

planning for a baby financially

Yeah, um, that’s less exciting.

Yes, babies are bundles of joy.

But, if we’re being humdrum, raising a family also involves a big financial commitment.

You may well need to budget, manage your savings, and double-check you’re financially ready before your little one arrives on the scene.

So, here’s how to budget for a baby – and we’ve got some tips for keeping your finances neat and tidy in the first year, too.

In this article 📝

  • How to prepare for your baby financially
  • How much does a baby cost per month on average?
  • How much money should you have saved before having your baby?
  • What should I do financially before having my baby?
  • Tips for after your baby has arrived

How to prepare for your baby financially

Among all the swirling emotions of pregnancy – the excitement, the insecurity, the joy, the nerves – there may be a nagging question that rears its head: am I financially ready for a baby?

Only you can answer that one.

But to help as much as possible, we’ve listed some guideline tips on how to get those finances in order before your little one enters the world.

But first, some background:

How much does a baby cost per month on average?

The US Department of Agriculture in 2020 estimates that the average cost of a child is $233,610, from birth to the age of 17.

That works out to an average cost per month of just over $1,100.

This includes all the regular expenses during babyhood and childhood, such as clothes, food, medical bills, school supplies, activity fees, vacations, and so on.

Some of that cost is front-loaded into baby’s first year, when you might end up buying a lot of stuff and maybe having more medical bills than usual.

According to one survey, the average cost of the first year of a baby is as much as $21,000. But remember this is just one survey, and it’s an average.

How much money should you have saved before having your baby?

As we said, $21,000 is a number that popped up in a survey.

But really, there’s no official figure to save before having a baby.


Do whatever you can.

A good way to work out a rough number is to calculate your medical expenses and your baby budget for the first year.

But don’t forget the non-baby-related stuff, too. Retirement funds, mortgage payments, and ongoing living expenses.

What should I do financially before having my baby?

Here are some things that might be worth thinking about before having a baby:

1. Planning for maternity or paternity leave

If you’re hoping to take some time off work during this time (recommended!), it’s best to work out how this might impact your finances.

2. Understanding your health insurance

Even with health insurance, the costs of having your baby can add up.

Knowing what your insurance (or your partner’s) covers will keep surprises to a minimum when the medical bills arrive.

And when the little one makes their appearance, you’ll want to add them to your insurance – so check out in advance how you can do that.

3. Setting up a baby fund

This is where you can put money away for your “pregnancy budget” to spend on the big purchases, e.g. the stroller, car seat, or crib.

4. Starting a rainy day fund

If you don’t already have somewhere you set aside money for emergencies, it might be beneficial to start a fund now.

As we all know, little ones tend to be emergency magnets – which can make a rainy day fund useful in the end.

5. Cutting expenses that aren’t worth it

Are you using that gym membership?


Do you watch all the streaming channels you’ve signed up to?

Do a little audit before or during your pregnancy, and see if there are areas where you can save some pennies.

Tips for after your baby has arrived

The first year after your baby’s birth will have its own share of financial demands. Here are three things you might want to think about:

6. Planning for childcare

If you’re going back to work (or also if you don’t work), you might want to think about getting a nanny or signing up for daycare.

Even if you or your partner take days off during the week, that’s not always technically “free” – because you may have a reduced household income as a result.

7. Saving for future education (or travel)

Unfortunately, college costs.

So if you want that option on the table for the future, the saving might need to start soon-ish.

And if your little one flies the nest and goes on a round-the-world hike (eek!) instead, this fund can help keep them moving.

8. Paying for life insurance

A bit morbid, but just something that needs to be done.

9. Consider a baby clothing rental subscription

Baby clothing rental subscriptions, like Bundlee can save an average of £1,000 in baby’s first year alone.

After all, they outgrow 5 clothing sizes in their first year.

That’s a lot of onesies.


Yep, planning for a baby financially isn’t the stuff dreams are made of, but it’s an important step on the parenthood journey.

We hope we’ve given you some useful pointers.

Read also:
What’s the Cost of Raising a Child?
How to Save for a Baby: 10 Money-Saving Tips & Tricks
8 Things You Don’t Need to Buy for Your Baby
What to Know About Stress While Pregnant

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