Introduction
If you’re a new parent or expecting a child, congratulations! Welcoming your newborn is a wonderful life event that brings lots of changes. It’s definitely an exciting time — and also potentially an expensive time. Between baby gear and diapers, childcare and clothes, those expenses can add up quickly.
Most Americans underestimate the average costs of having a baby, and then raising that child for at least 18 years. Starting with realistic expectations can make the whole thing go more smoothly.
Luckily, there’s a lot you can do to reduce the cost of a baby. The better your budgeting habits, the more you’ll be able to save in the first year and beyond. And that potentially means more money to put aside for college.
You’ll hear repeatedly how fast these years go, and it’s absolutely true. Since there’s no time to waste, let’s jump right in and take a look at how to budget for a baby and beyond.
Things To Consider When Budgeting for a Newborn Baby
Your first step to being a savvy parent is assessing your current budget. Where’s your income going right now? Do you have a plan that accounts for every dollar? Making some spending changes ahead of time can help you comfortably accommodate your little bundle of joy.
Next, reevaluate your concept of “must haves” for your baby. A lot of parents overspend on toys and clothing that their little one will quickly outgrow anyway. You don’t need a closet full of adorable outfits that will only be worn once or twice, but you do need your basic wipes, diapers, onesies and blankets.
You can limit the need to spend by approaching this systematically and only buying what you need right now. Keep the clothing simple and look for toys that are timeless, like blocks, balls, and books, with a plushie or two for good measure.
You’ll also need to invest in essential baby gear, like a stroller, crib, bassinet, car seat, and high chair. Some products do double or triple duty to give you more bang for your buck, like a car seat that converts into a stroller or bassinet.
Do some research before purchasing to make sure you don’t overspend. The baby product industry is constantly evolving, and new items are released based on both trends and safety requirements. Also, if you plan on having more than one child, make sure you’re buying the quality and color scheme that will last from one baby to the next.
How Much Does It Cost To Have a Baby?
It’s a good question to ask, but the amount you’ll pay to have a child depends on several factors. Both prenatal and childbirth costs vary with each doctor, hospital, insurance plan, and state. A lot of healthcare providers use a fee-for-service system, which means that each visit, test, consultation, and procedure is billed separately.
The pregnancy journey involves a lot of important steps, with prenatal appointments usually scheduled every four weeks until the mother-to-be is 36 weeks pregnant. If any issues are detected along the way, additional appointments may be required. Then it’s another visit at 38 weeks, and typically weekly after that until the baby is born.
The birth itself can be one of the largest expenses because it often includes hospital stays, anesthesia, and possibly surgical procedures. Delivery complications and premature births cost even more because of the intensive care required.
Fortunately, coverage for pregnancy and maternity care is included in almost all health insurance plans because it’s required by federal law. What ultimately determines how much you’ll pay during these nine months is the out-of-pocket spending limit on your health insurance plan. Averages tend to range anywhere from a few thousand to tens of thousands of dollars.
Always use doctors and hospitals in your plan’s provider network so you know you’re covered. If you’re ever unsure about providers in your network, your out-of-pocket limit, or any other details, you can always call your insurance company with your questions.
How Much Does It Cost To Raise a Child?
Once you’ve brought that adorable baby into the world, the expenses continue to add up. A 2025 study shows that raising a small child costs more than $29,000 a year, which is nearly a 36% increase over the same analysis from 2023. Those costs include food, clothing, transportation and childcare expenses. Over the course of 18 years, you’re looking at close to $300,000 per child — and even more if you live in Hawaii, North Dakota, Maryland or Washington state.
While these numbers may be shocking, there’s some good news. They might represent the average cost to raise a child, but you do have the power to influence how much you’ll actually need to spend. Looking for low-cost options and using money-saving strategies can potentially reduce these numbers to something quite a bit more manageable.
Childcare costs
If you have obligations outside of the house, or you work from home but need uninterrupted office time, you’ll likely face childcare costs along the way. This is often the biggest expense for babies and young children, and you might not have a lot of control over the amount. Monthly childcare costs will vary by location, the child’s age, and how many hours you require care. Don’t forget to include possible additional expenses like registration, supply fees, and meal purchases.
However, shopping around will reveal a lot more options than you might expect. A high-end preschool with all the latest amenities is likely going to cost a lot more than a basic childcare facility, which could still be more expensive than a non-profit daycare center or private in-home daycare.
You might even have friends or family members who are willing to help out for the opportunity to spend time with your little one. To take it a step further, you could consider trading off with other parents — they watch your child one time, and you watch theirs the next.
Nutritional costs
Of course, your child needs to eat, and the older a kid gets, the more they’ll consume. Starting with your infant, breastmilk is free, but some parents need to purchase formula instead. If that’s your situation, powdered formula is usually the cheapest, store brands cost less than brand names, and you may be able to get free samples from your pediatrician. Food banks, government programs and charities can also be a good source.
When you transition your baby to solids, blending up your own steamed veggies and fruit chunks is usually cheaper than jarred baby food. Later on, fast food might become tempting, but it’s not very healthy for regular meal-planning. And in reality, you can actually save more by shopping for groceries and cooking at home.
The outer perimeter of a grocery store typically carries the fresh food — like produce, meat, eggs, and dairy. But don’t overlook frozen foods like pre-cut fruits, vegetables, proteins, and ready-made stir fry, which are often just as nutritious as fresh, and easier to stock up on. Even canned and packaged food that you prepare yourself can be healthier and less expensive than fast food.
Additional Ways To Save Money With a Newborn Baby
Being strategic with childcare and food aren’t the only ways to cut costs. You can shrink your baby budget by hundreds or even thousands of dollars with a few money-saving tips. The more you can save, the less likely you’ll have to go into debt to pay for baby expenses.
- Consider cloth diapers instead of disposables, both for environmental and financial reasons.
- Ask family and friends for baby essentials like a crib, car seat, baby swing, toys, or clothes that their children have outgrown. You can offer to buy their gear at a discount, but many parents are happy to unload what they’re no longer using for free.
- See if you can borrow items that you don’t have. This may help you put off some necessary expenses until you’re able to purchase a worthwhile stroller or crib yourself.
- Shop at thrift stores or buy baby clothes, shoes, and toys from online secondhand marketplaces.
- Use coupons to help save on your weekly baby supplies. Every dollar counts!
- Look into local assistance if you’re still finding it hard to afford what you need. Many non-profit organizations and government programs provide essentials to low-income families.
Bottom Line
Having a baby and raising a child isn’t cheap, but it’s definitely worth it. And you can limit your expenses by following cost-cutting tips and making smart purchases, especially during that first year.
Some key strategies include keeping track of your budget and watching your own spending habits beyond just purchases for your child. You’d be surprised at how much more you could have for your baby budget simply by planning out where every dollar goes ahead of time.
