How to Budget for a Baby on a Modest Income

by Sarita Harbour, Demand Media
    Start budgeting for baby as early as possible.

    Start budgeting for baby as early as possible.

    Many expectant parents react to the news of a pregnancy with both joy and worry about the expense of a new baby. According to the Expenditures on Children by Families report released by the United States Department of Agriculture, a child born in 2010 will cost $226,920 (before inflation) to raise until the age of 17, a large amount for families on a limited or single income. Make financial adjustments and preparations for your child before he arrives and enjoy the first few months of parenthood instead of worrying about the family budget.

    Step 1

    Lessen the financial impact of a new baby by reducing expenses or increasing income immediately, especially if one parent plans to take maternity leave. Calculate how much income will be lost during maternity leave, and reduce expenses now to cover the future shortfall. If that parent will not return to work when the leave ends, adjust your budget now to live on one income, and direct the mother's current pay to savings.

    Step 2

    Start budgeting for your new baby as soon as you discover you are pregnant. Save a few dollars every week for nine months rather than struggling to save hundreds in the last few weeks before the baby is born. List the essentials your baby requires, such as a car seat, diapers, crib and clothes. First-time parents may feel they need many other items, but budget for these at the start.

    Step 3

    Look for ways to reduce the cost of the necessary items. Visit consignment or thrift stores and garage sales to find gently used items. Borrow or offer to buy other items from family, friends or co-workers who have recently had children. Plan to breast-feed your baby to avoid adding costly baby formula to your monthly budget. If you expect to use disposable diapers, clip coupons and begin stocking up when they are on sale.

    Step 4

    Scrutinize your existing expenses and identify areas for cost-cutting. Explore cheaper housing options such as moving to a less-expensive area, or boost income by renting out a room or basement apartment to a tenant. Reduce transportation costs by replacing a car with public transportation. Cancel your cable television and borrow free DVDs from the library or watch your favorite programs online. Cancel your home phone and call your cell phone service provider to discuss options for lowering your monthly bill. If possible, increase income with a part-time job or a home-based business.

    Tip

    • Study your health insurance to understand specifically what will be covered by your plan for the prenatal care, labor and delivery of your baby and when you can add the baby to the plan.

    Warnings

    • If you don't already have an emergency fund, start budgeting now to save enough to cover three months of living expenses. You won't want to deal with paying for vehicle repairs or a new furnace when new baby arrives.
    • Ensure any used car seats or cribs meet current safety standards before using them for your baby.

    About the Author

    A former financial adviser with more than a decade of experience in personal finance and small business banking, Sarita Harbour is a professional writer specializing in personal finance, small business, technology, and content marketing techniques. Her writing appears online at sites such as Yahoo! Homes and Bob Vila. Harbour holds a bachelor's degree in psychology and computer science from the University of Guelph and the Personal Financial Planning designation from the Institute of Canadian Bankers.

    Photo Credits

    • Jupiterimages/BananaStock/Getty Images