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How to Budget for a New Baby

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How to Budget for a New Baby

A new baby is something to celebrate, but that little bundle of joy can also add stress to your finances if you are not properly prepared. Not counting the cost of higher education, raising a child can cost more than $230,000, according to the U.S. Department of Agriculture.

Following are four steps you can take to help reduce the financial stress that comes with having a child.

  1. Cut down or eliminate credit card debt. Having less debt before the baby arrives will allow you to reallocate more money toward child care expenses.
  2. Calculate all monthly child care expenses. Start investigating how much your child care expenses will be. Shop around for day care needs and other necessities. For example, babies typically go through 10 to 12 diapers per day. Find out how much that will cost you per month, as well as wipes, baby formula (if necessary), doctor’s visits, etc. Add everything up.
  3. Create a new budget. Add your upcoming child care expenses to your budget, and determine what expenses you can reduce or eliminate before the baby is born. Make as many adjustments as needed to compensate for the anticipated expenses so you can balance your new budget.
  4. Implement new budget before the baby arrives. Now that you have set a new budget, start using it two to three months before the baby is born. Since you won’t be using the child care expenses, yet, put that amount into savings to build a cushion for unexpected expenses. This will also help you grow accustomed to your new budget ahead of time.

Tips for Trimming Your Child Care Budget

  • Create a baby fund. Designate a savings account for child care needs and contribute to it monthly. Only use it for child-related expenses.
  • Buy second-hand or discount clothes and toys. Again, babies grow fast. Check out local thrift stores and dollar stores for clothes and toys so you don’t overspend on clothes that will not fit your baby for long, and toys that will lose your baby’s interest.
  • Make your own baby food. Look for recipes for how to make your own baby food once your little one is ready to try solids. 


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