How Much Should Be Budgeted for a Newborn?

Budget for baby before you bring him home from the hospital.
i Jupiterimages/ Images

When you’re counting every penny, a new baby may make finances even tighter. Whether you’re a one- or two-income team, approach parenting with your eyes wide open to make the right financial decisions. One of the biggest challenges may be to figure out how much should be budgeted for a newborn.

Nursery and Equipment

Nursery and baby equipment varies greatly in price, depending on what you purchase. For example, a convertible crib that changes from a crib to a toddler bed to a standard twin bed can cost more than $2,000 as of 2012. A simpler crib may be only a few hundred dollars. You can also save money by purchasing used furniture and equipment, receiving items as gifts or borrowing items from friends and family. Basically, determine how much you want to spend on baby equipment and furnishing the nursery and then make it happen. You could furnish a nursery for as little as $500 or you could spend thousands of dollars – whatever fits your budget.


Newborns require a basic wardrobe because they grow very quickly. You can spend very little if you borrow clothing or purchase used clothing. You can also spend hundreds of dollars on a newborn wardrobe if you purchase expensive boutique outfits. Your diaper expenses will depend on whether you use disposable or cloth diapers. The Baby Center website estimates that disposable diapers for a newborn will cost $72 each month. The same website estimates that using a diaper service would cost $76 each month and washing your own cloth diapers would cost $19 each month. The cost to purchase cloth diapers varies, depending on the type of diapers you purchase and the number of diapers. Again, you can spend more or less depending on your budget, but cloth diapers for a newborn need not cost more than $50 if you want to cloth diaper on a shoestring. You could also spend hundreds of dollars on expensive pocket diapers in stylish colors and prints.


Food for a newborn varies depending on whether you breastfeed or formula feed. If you breastfeed exclusively, the cost is virtually nothing. If you breastfeed but wish to express breast milk for bottle-feeding, you will require a breast pump and bottles. Breast pumps vary in price from inexpensive ones under $100 to hospital-grade pumps that cost hundreds of dollars. Many insurance policies offer assistance for affording a breast pump, including rental programs and discounts off the purchase of breast pumps. The Breastfeeding Center of Ann Arbor website advises that formula feeding a newborn for the first month will cost between $49.50 and $99, depending on how much the baby eats and the formula you choose. Powdered formula is the least expensive, while ready-to-feed formula has the highest price. Store-brand formula is less expensive, and specialty formulas are more expensive. Bottles also vary in price depending on the materials contained in the bottles (plastic or glass) and the style of the nipples and bottles. A standard set of three bottles may cost only a few dollars, while one premium bottle may cost as much as $12.99 per bottle, according to "Consumer Reports."


If you plan to place your child into daycare, shop around to find the type of care center that fits your style and needs. According to the WebMD website, average daycare costs are approximately $1,200 per month. Whether you want a home setting with a registered daycare provider or you prefer a daycare center for your child, investigate the rates and fees. Rates vary according to geographical location, but generally, a home setting will be less expensive than a center. Take advantage of any care vouchers you may receive from your employer and also utilize tax deductions for your daycare expenses – as much as 35 percent, according to the Internal Revenue Service.


Budget for incidental costs connected with your newborn, also. According to the BabyCenter website, medicine will cost approximately $23 per month, toiletries will cost approximately $21 per month and many parents spend as much as $35 per month on toys and books. Add in college savings, if possible, at $50 per month.

the nest