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You’ve heard it before, “babies are soooo expensive”, but what makes them so expensive in the first place? And if it’s true — how can expecting families afford newborn essentials on a budget? Learn all the steps you should be taking to prepare your budget for a new baby with help from an expert financial planner, Sahirenys Pierce.
Let’s be honest. I have two children myself and if I tried to tell you budgeting and financial worries never crossed my mind during pregnancy, that would be a big lie. Thankfully, my husband and I made sure to prioritize our family budget before we started our family, but still, I’m no expert.
To better help cover this specific topic, my friend Sahirenys Pierce, a millennial & family financial planner, mom of 2, and Founder of Poised Finance + Lifestyle is here to share her TOP 3 Tips on how to prepare your finances for a new family addition!
But first, check out this video to learn how you can start building a “financial first aid kit” for big events (like having a baby, needing a new car, etc…)
How Much Does It Cost to Raise a Baby?
According to a USDA Expenditures on Children by Families reportin 2015, a married, middle-income, two-child family (earning around $59,200 and $107,400annually) will spend $12,350 – $13,900 annually in the first year of their younger child’s life.
If those numbers make you uncomfortable, let’s take a deeper look at how we can better prepare.
You can try to use an online calculator to try and estimate the cost of raising a baby, however, there isn’t a calculator that can truly estimate every single thing related to baby-racking expenses.
Instead of trying to look up every single item from every single store, pick one place that will be most convenient for you to shop at whether it’s online or in-store and use those costs as a baseline to prep for your estimated baby-budget!
But before we jump straight into the budget building, let’s hear what Sahirenys from Poised Finance + Lifestyle has to say!
How to Afford Newborn Essentials on a Budget (3 Expert Tips)
According to Sahirenys, “The top three tips I would advise families to prepare for a baby financially are:
Add Newborn Essentials & Baby Expenses to The Budget
These essentials include baby diapers, baby wipes, formula, and other small needs. It is no surprise that these baby items cost a lot when bundled altogether. The best thing to do is be realistic with the new expenses the baby will add to the family budget and pick how you’re going to buy it.
“For me, it was easiest to do a monthly subscription with Amazon Prime to have my baby items mailed to the house every month. It helped me stay clear from running out and being tempted to go to other stores to buy other items”, she says.
Add Some “Play Money” To Your Lifestyle Budget for Baby
Your baby will still need clothes, shoes, and some fun money for activities. Make sure you’re realistic with how much you need to save for any big adventures or shopping sprees. I know I had to budget to buy clothes every 3 months to keep up with the growth spurts of my children.
Add a First Aid Kit to Your Budget for Unexpected Expenses
This cushion is for unexpected doctor visits, medicine, and any small, but urgent expenses that are less than $100. Having this money just in case is very helpful when you have a tight budget because unexpected situations are going to be very common with kids. “I remember constantly going to the doctor freaking out because I didn’t know what was wrong with my baby. Come to find out it was an ear infection that just needed some medicine to cure. All of that ended up costing $60 that I didn’t expect to spend or necessarily have in my budget” explains Sahirenys about how having a First Aid for her budget helped to transform their finances.
Now that you have a better idea of what things to start thinking about when it comes to affording newborn essentials on a budget, now you can take the proper steps to start saving.
How to Afford Newborn Essentials on a Budget in 5 Steps
First things first, you can’t prepare a budget if you don’t know where your current money is going. That’s why we’re going to break down all of the steps to prepare a budget plan for your family.
So if you don’t already, make sure you have a RELIABLE CHECKING or SAVINGS ACCOUNT in place.
If you’re looking to establish one, we both recommend CHASE BANK. They’re reliable, have been around for quite some time, and have some pretty sweet cash-back incentives as well.
Once you have a reliable checking or savings account in place, the next goal is to figure out your income to expense ratio. This means we will add up all your income and subtract your expenses.
If your expenses exceed your income, we need to make some major adjustments. If you’re breaking even, still need to make some adjustments. Now if you have a lot of money left over, you’re ahead of the game and we can really focus on setting aside some money for a rainy day aka your new baby!
Step 1 – Track your current spending habits for at least 2-3 months.
You will want to account for ALL spending when you are tracking. This means any quick Starbucks runs, a cheeseburger fix, and those TJ MAXX hauls – yep, those ALL count.
Once you have a better idea of where your money is going, you can cut back on excess spending. You can also consider lowering some of your monthly bills if you’re currently living beyond your means.
Once you’ve tracked all your spending, you can organize and add it up into the following categories below:
Step 2 – Organize your monthly expenses
Organizing your budget will have 2 parts: MANDATORY expenses & VARIABLE expenses.
Mandatory expenses will be ALL your bills that are a FIXED part of your day-to-day living. Meaning, you don’t pay this bill, there are some serious repercussions!
- Rent/Mortgage
- Gas
- Groceries
- Phone Bill(s)
- Car Payment(s)
- Loan Payments (student loans, personal loans, etc…)
- Homeowners Insurance
- Trash Bill
- Water Bill
- Other Utilities
Variable expenses will be ALL of your non-fixed expenses (NON-NECESSITIES). This includes traveling, going out to eat, shopping, etc…
- Entertainment add-ons (Netflix, Sling, HULU, HBO, Disney, etc…)
- Beauty care (nails, hair, makeup)
- Restaurants
- Recreational Parks
- Vacation Expenses
- Video Games
- Movie Outings
Step 3 – Calculate & write down your average monthly income.
Depending on how you get paid, you will need to add up ALL your net income. Obtaining an average monthly net income will help us determine where our budget needs to be.
Step 4 – Find the difference between your Income & your Expenses:
You’ll want to subtract your Total Expenses from your Income.
Example: Income – Total Expenses = _______________
If you end up with a negative number here, that means you should reevaluate your expenses as there’s probably some debt involved or actively accruing each month.
How? Subtract your fixed expenses from your income, if you have a negative still, you’re living above your means with JUST your fixed income. If you have some leftover money, you have some room to adjust your variable expenses.
If you end up with a zero or close to 0 balance, you’re probably just getting by each month. you should still reevaluate both fixed and variable income in the step above.
When you end up with excess monies, then you’re doing a great job staying ahead. This means you can likely look into adding a “PREPARING FOR BABY” savings fund!
Step 5 – Putting it all together and building your budget:
The way I have personally been advised and live by is to always make sure my husband and I have 6 months’ worth of our MANDATORY expenses set aside in an emergency fund.
Why? If my husband and I ever lost our jobs or something unfortunate happened, we want to make sure we could survive with enough time to get back on our feet! Being parents, it’s 100% crucial for us to always be prepared for anything.
Once you are able to adjust and determine your mandatory expenses, work towards slowly building up your savings to reach that number.
The cool part is you can 100% include baby expenses in your mandatory expenses – I mean at least for the first year you won’t be able to live without certain items for the baby, so you might as well consider it a mandatory item.
If you have significant debt, I would highly suggest checking out Sahireny’s Get Debt-Free In 6 Steps Article – it is laid out to help you pay off your debt step-by-step, making it an easy plan to execute!
Other ways to financially prepare for a baby & get newborn essentials on a budget:
Accept hand-me-downs for baby when applicable.
One way to make things a little easier if to accept hand-me-downs. I know for us, we have SO many brand new unused clothing for our son because he just grew so quickly. Depending on whether or no we have another son, we will likely give our current clothes away or donate them.
In addition, I think it’s perfectly fine to accept gently used baby gear such as baby swings, rocking chairs, etc…
However, the one thing I would personally steer away from is car seats. Sometimes they get recalled or become outdated or just the cushions become thinner from the use, so for safety purposes, I’d opt for a new one.
Start meal-prepping weekly!
Meal prepping can save you a ton of money on your grocery bill. As long as you aren’t meal prepping extravagant 10+ ingredient dishes every day, you can easily save $50+ on your next grocery bill!
Personally, I enjoy making simple dishes. They aren’t always the most flashy or fancy, but they’re cheap, convenient, and really easy to whip up for my week! Not to mention, they’re generally pretty healthy and macro-friendly!
When preparing my meals I make sure I have a lean protein source, some carbs, 1 serving of vegetables, and healthy fats per meal.
I’ll prepare all the meat in bulk. For example, if I get 4lbs of ground turkey, I’ll prepare 2lbs with one flavor and the other 2 with a different flavor. This way I can have some variety in the meals I’m eating.
I use that basic concept with every food category to keep my meals easy and cheap!
Look into baby companies that send free stuff!
When we were expecting, one of the first things I did was look up ‘how to get free baby stuff‘.
I soon found there were some awesome (and easy) ways to score some free baby supplies!
I compiled an easy list below here for you to snag some baby freebies:
- Amazon Baby Registry – simply sign up & follow the instructions to qualify for a free baby welcome box!
- Target Baby Registry – Target will give you freebies JUST FOR SIGNING up for their baby registry, pretty rad right?!
- Noobie Box – Pay $5 for shipping and get a full box of baby goodies/samples for your little baby!
- Enfamil – sign up for the Enfamil samples and you’ll snag some great coupons + free baby formula!
- BabyBoxCo – sign up for some free parenting courses & get rewarded with freebies for watching them!
- Similac Strong Moms Kit – similar to Enfamil, just sign up and snag your goodies!
- Amazon Family Prime – Sign up for a FREE 30-day trial and get awesome savings such as 20% off diapers/wipes so you can stock up on what you need for baby at a discounted rate!
Join your Local ‘Buy Nothing’ Group on Facebook
Buy Nothing groups are a great way to score used, but free items within your local community. I know many friends who have scored some expensive baby items (unused too) for completely free. The only thing you’ll want to make sure of is that you’re not buying used or outdated car seats and anything that is meant to keep your baby safe.
What tips would YOU share to help other parents afford newborn essentials on a budget?
More pregnancy articles you’ll enjoy:
Beautiful Pregnancy Planners to Capture EVERY Moment of being Pregnant
Definite signs labor is 24-48 hours away, are you ready?
