That’s our recommendation for how much money to save before baby arrives.

Of course, everyone’s situation is different.

But barring anything out of the ordinary like severe health complications during pregnancy or birth (knock on wood), that amount should cover the key baby budget expenses that come before and during the wee one’s grand entrance.

Now, that probably won’t cover every single cost you’ll incur during baby’s first year (but major kudos if it does!), so you should try build as much cushion beyond the $5,000 as you can, since you never know what can come up.

Still, having that $5,000 banked will make baby’s arrival a whole lot less stressful.

Babies are quite the expense, so our #1 advice for any expecting parents out there preparing for a baby is to make sure you include planning for a baby financially.

If you don’t, the whirlwind of the newborn experience could end up feeling more like a hurricane.

This post may contain affiliate links. See disclosure for more details.

planning for a baby - how to prepare financially


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  • Learn where you stand to save the most
  • Detailed breakdown of hospital birth costs & first-year expenses to expect
  • How to get essential baby items for cheap or free
  • Action plan checklists, worksheets, and trackers to help you stay on budget

How to plan for a baby

When planning for a baby, the first thing you want to do is anticipate what you’ll need to spend money on.

Your goal is to save for those costs slowly over the pregnancy rather than being blindsided by huge bills and tons of costs.

We’ll show you a month-by-month plan to tackle the new money issues that come with having a new addition in your family.

How much does it cost to prepare for a baby?

As frugal as my husband and I were, we ended up spending over $6,000 in that first year. For us, that’s a whole lotta money.

We learned that it’s too easy to rack up the bill unnecessarily if you buy on the fly without a plan (seriously, watch your wallet, baby stuff can be total adorbs), so start by taking a second to look at what you actually need.

Here are the basics that you’ll need to think about:

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  • Basic necessities
    • Housing
    • Utilities
    • Transportation
save money on baby essentials feeding
  • Baby needs
    • Clothing
    • Feeding
    • Changing
female doctor icon - save money on healthcare
  • Health/Medical costs
    • Doctor visits
    • Labor and delivery
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  • Childcare
  • To get an estimated budget of what you can expect to spend in each of these areas, check out our other post about how much do babies cost to see exactly what we shelled out and whether in hindsight those costs were truly necessary.

    When should you start preparing for a baby?

    It’s probably no surprise that we’d say the earlier the better, so you’ll have more time to work on hitting your savings goals to prepare sufficiently for the baby.

    But sometimes life doesn’t work like that. Aunty Chang had a coworker who didn’t know she was pregnant until she was 7 months in, yikes! (The doctor had originally said her medical condition would rendered her unable to have kids…whoops).

    To help keep things simple (as I’m sure you’re also preoccupied with morning sickness, figuring out which of the 100s of strollers and car seats you want for your precious kid, etc.), we suggest focusing on just one major task each month leading up to the birth, so that you aren’t overwhelmed with planning for your baby financially.


    If you’re already further along your pregnancy, then just double up some months.

    And if you’re pumped to get these tasks done earlier than the timeframe laid out (right on!), by all means go right on ahead.

    how much do babies cost - mother holding baby feet

    Preparing for a baby: Month-by-month plan

    Here is a table summarizing the major task to focus on each month. Underneath, you’ll find more detailed guidance to help you navigate the different tasks.

    MonthMajor financial task
    Month 1Track expenses and savings
    Month 2Set up a dedicated account for baby fund
    Month 3Talk with HR
    Month 4Figure out healthcare costs
    Month 5Look into childcare
    Month 6Figure out what baby gear and items you plan to get for baby
    Month 7Create baby registries
    Month 8Have a plan for worst case scenario
    Month 9Get paperwork ready for after birth
    Birth & beyondContinue to be a good financial role model

    Month 1: Track expenses and savings

    If you don’t already know where your money is going, now is the ideal time to figure that out.

    You will soon be responsible for the life of another human being, so it’s important that you get your financial act together. Not just so you can take care of your baby, but also because you will be a financial role model to your little one for the next 18 years.

    Take out your credit card statements, bank statements, and receipts to understand where your money has been going.

    It helps to organize what you’ve spent by categories, such as housing, medical, food, etc. We’d recommend doing this for each of the past three months, just so you can see if you are pretty consistent or if there is lots of variation.

    Also, find out how much you have saved up in your accounts, not counting your emergency fund, retirement accounts, or other monies you should avoid tapping into.

    If you aren’t at the $5000 mark yet, go back to the categories you analyzed earlier and highlight all the things you spend money on that aren’t vital. For the next few months, vow not to spend on those things or places so you can begin putting more towards the baby fund.

    blue eyed baby on soft blanket

    Month 2: Set up a dedicated account for baby fund

    For those who have trouble saving, setting up a separate account specifically for your baby expenses is a great tactic for several reasons.

    1. It’s easy to see where you’re at and how much further you need to go.
    2. It’s really encouraging to see the progress you are making as you deposit funds to the account.
    3. You’ll probably feel guiltier about tapping into this fund for unnecessary expenses.

    Our baby fund bank of choice was Discover Bank. We loved the impressive interest rate we were earning on the savings account as we were growing our fund. And when we ready to buy things, transferring the funds to their free checking account gave us easy access to our money.


    Most high-yield savings accounts, including the one at Discover Bank, only allow six free withdrawals per month. As such, plan any transfers out of the account carefully to avoid any fees.

    Month 3: Talk with HR

    You might have snoozed through new hire orientation, but it’s time to reacquaint yourself with your employee benefits.

    Don’t assume you remember all the benefits you have; make an appointment to meet with your HR rep to find out everything you can about your rights and benefits as an employee. Just as importantly, you’ll need to know how to apply for them.

    Here are three extra important topics to ask about:

    couples finance husband wife girlfriend boyfriend partners

    Maternity/paternity leave
    Find out how much leave you can take, what kind of job protection is granted by law, and whether you have to take all the leave at once.

    personal finance banking institution icon

    Tax savings accounts
    You can potentially save money on healthcare, childcare, and college savings with tax savings plans if your employer offers them. Ask for info on how to set them up.

    get insurance terms and conditions contract

    Health insurance
    Getting insurance for both you and baby is a crucial financial move. Find out when and how you can both be added.


    If your pregnancy runs through open enrollment, then you have the advantage of being able to switch to a better health plan if one is available.

    Remember that after you give birth, the only edit you can make is to add your baby onto the insurance you have. You can only change which plan you have during open enrollment.

    Month 4: Figure out your healthcare costs

    One hunk of a bill you can look forward to is the cost of your hospital birth. Call your insurance company to request your estimated out-of-pocket costs so you can get an idea of what you’ll be paying.

    While you are on the phone, be sure to ask about the other important details of your plan, like out-of-pocket limits, deductibles, and such.

    It also doesn’t hurt to ask the insurance carrier if they have any cost-cutting suggestions; they have to foot part of the bill too so they should be happy to give you some pointers.

    And remember that you’ll also visit the doctor often during the pregnancy, so be prepared to have medical expenses leading up to the actual birth as well.

    daycare costs - two girls hunched over book

    Month 5: Look into childcare

    One of the first pieces of advice you’ll hear from other experienced mothers is that you need to check out affordable childcare options asap, as spots fill up pretty quickly.

    Keep in mind that there are actually a multitude of childcare options to choose from, not just daycare.

    Explore all of your options and take the time to visit daycares or talk with potential babysitters to find who you think would be the best fit.

    Ask about the rates and any extra costs so you know how much you’ll need to save.

    It’s also important to discuss with your partner how the new baby might change your work situation. Perhaps you’ll need to switch up your hours, reduce them, or even become a stay-at-home parent to make this work.

    Figuring out childcare is a major logistical decision, so you may need time to sit on this. That’s why it’s better to tackle this during the earlier months so you have ample time to figure out how to execute this plan.

    Month 6: Figure out what baby gear and items you plan to get for baby

    Babies need a lot less stuff than you think. Take a look at our list of baby essentials to determine what things are truly necessary or useful.

    See which items you can repurpose from things you already have in your house, are willing to get secondhand (such as through the Decluttr app or Facebook Marketplace), or can gather from friends and family whose kids are past the baby stage.

    If there are any big ticket items you’ll need to buy, use this month to do research on which brands and models you want:

    • Crib or playpen
    • Stroller
    • Car seat

    Here were our picks that we were more than satisfied with:

    Infant car seat

    Safety is definitely one area we didn’t want to skimp on, so this was one of our premium purchases. Luckily, we didn’t have to pay a fortune for quality.

    We picked this particular car seat because:

    • it had good reviews on Amazon and ranked as a top choice on reputable comparison sites
    • it was at a price that didn’t break the bank
    • we’d get good mileage for 10+ years, as it can be used as a rear-facing seat during infancy, converted to a front-facing seat in the toddler years, then still be used as a booster seat after that

    Pack n play

    This item had dual functionality. First and foremost, we wanted a temporary sleeping space for our son that was close to but not in our bed. A playard with a bassinet attachment was the most cost-effective option. It was so much more convenient to have our son right next to our bedside in those first few months.

    Second, it served its main purpose as a playpen and makeshift sleeping area if we weren’t at home.

    You can’t go wrong with this budget-friendly option.


    Some parents go without strollers. But since we went on daily walks with our son, it was a good investment for us. We chose this particular model, which came in under $100, because it could be used from newborn to a couple years of age.

    Others suggest having two separate strollers, one where the infant car seat snaps in, and then another umbrella stroller for when your baby is older. Our choice of having only one stroller was a lot cheaper.

    Plus, this stroller was pretty minimalist and didn’t take up too much space. This was great for our small house and small car.

    Month 7: Create baby registries

    Yup, we said registries, plural.

    Considering that they’re free, usually come with a slew of free baby stuff when you sign up, and make it as convenient as possible for family and friends to get you the things you need for a baby, we do recommend signing up for several registries.

    When adding things to your registry, stay away from stuff that you don’t absolutely need. The more frivolous options you have, the more chances there are for your friends & family to get you non-essential items, which just means you’ll have to put out the money yourself for the must-have things later.

    The Target baby registry is our favorite, and Amazon’s baby registry is definitely worth signing up for too. If you have a Buybuy Baby near you, sign up for that baby registry as well for even more free samples and discounts.


    Don’t jump the gun on purchasing any remaining baby registry items just yet.

    Wait until month 8 at the earliest, after you’ve qualified to receive your registry completion discount.

    Your coupon should be good for a period of time after your baby is born, so you have until then to use it.

    Month 8: Have a plan for the worst case scenario

    As uncomfortable as it might be to think about, the reality is that accidents and other bad things can happen to you or your significant other. One of the best things you can do for your family is to plan for that scenario before it occurs.

    First off, look at your finances to see if you and your partner need life insurance. If one of you passed away, could the other person cover the bills AND pay for childcare on their salary alone? For most people, the answer is no, so getting life insurance to provide those funds is a must.


    There are many different types of life insurance out there, but the only one you need to consider is term life insurance.

    Insurance companies get a huge commission from the other policy types, yet the likelihood that you will benefit more from those other forms of life insurance is incredibly unlikely.

    Don’t fall for the pitch of an insurance agent that tries to tell you otherwise.

    You’ll also want to decide on a legal guardian just in case you and your partner both pass away before your kid turns eighteen. We highly recommend talking with the person you’d like to choose before actually naming them in your will, just to see if they are willing and able to serve that very important role.

    newborn baby in bassinet with hospital band on leg

    Month 9: Get paperwork ready for after birth

    Not going to assign you any tasks during this month since you’re about ready to burst. If anything, it’d be smart to start filling out any baby-related paperwork now. Once baby’s here, all you need to do is fill in a birthday and social security number.

    Some important tasks to get ready:

    • Adding baby to insurance plan
    • Putting in application to childcare centers
    • Updating account beneficiaries and will/trust to include baby

    Birth and beyond: Continue to be a good financial role model

    Just because baby’s here, doesn’t mean that your saving gets to stop. Baby is Latin for “lifetime of recurring expenses “so keep up your efforts to set aside money for your little one’s needs.

    Also, your child will eventually pick up and almost certainly repeat what you do with your money, whether you are a prudent saver or a rash spender. One of the harsh realities of parenting is that your kid will do as you do, not as you say.

    Give your child one of the best gifts you can as a parent that money can’t buy: solid money habits.

    Oh, and don’t forget to enjoy the kid. Parenthood will be more wonderful than you expected.

    How can I save when expecting a baby?

    If you’re looking for ideas on how to save for a baby, here are two suggestions:

    1. Focus first on drastic reductions of your bigger expenses.
    Costly things like housing or childcare will really put a dent in your budget, so these are the areas where you’ll tend to have the greatest potential for cutting down drastically.

    Perhaps you can move in with family to save on housing costs. Or, move closer to a relative who can watch your kid so you don’t have to spend thousands for daycare.

    2. Be consistently intentional with spending.
    It will also help your situation if you’re more aware of your spending habits. Ask yourself the purpose of a purchase; the more you focus on spending for practicality versus luxury, the more money you can save because you cut out the frivolous.

    3. Use a combination of these money saving tips to have more for your baby budget.
    We’ve put together a list of 35 tips on saving up for baby that have helped us save pockets of money here and there to help us offset baby expenses in the first year.

    More FAQs about financial aspects of baby

    Here are a few more answers to pressing questions you may have about the costs of raising a baby:

    How do I make a baby budget?
    There are key areas of expenses that you should budget for, which you can find in our post where we break down the question, “how much do babies cost?“.

    It’s by category of expenses, and includes my actual budget breakdown so you can see where my money went and how it compares to the national average.

    How much money should you have saved before you have a baby?
    Like we mentioned at the top of this post, a general amount that should help you through the first few months or longer is $5,000.

    As a point of reference, Papa Chang and I spent about $6,000-$7,000 in total during the first year. We were able to save a significant chunk because we didn’t require childcare. The rest came from smart planning with our baby essentials, including:

    • what we wanted to splurge on for lasting quality
    • what we were okay with having secondhand
    • and what items we deemed non-essential and skipped on (without missing out)
    How much does a new baby cost per month?
    Most of the expenses you will occur happen in the beginning stages, when you’re getting ready for baby. If you set aside about $5,000 to spend on the hospital bill and nursery and essential items, it should tide you over in the beginning.

    Of course, the more you save up, the easier it will be to handle whatever unexpected expenses may come your way.

    If you want to know “how much should I budget for a new baby per month?” more specifically, it’s hard to give a consistent amount since that will depend on a variety of factors, such as if you require childcare.

    Try to foresee what costs you may incur, such as by checking out our detailed baby expenses tracker in our baby budget guide, to determine how much you should set aside each month.

    How can I afford a baby on a tight budget?
    Like we talked about in the section above on “how to save when expecting a baby,” your best bet is to focus on big-ticket expenses first. This may include moving back home or downsizing.

    Then, try the tips laid out in our saving for a baby post to cut down costs.

    Every little bit you can cut out helps.

    You may also want to reach out to government or non-profit organizations that provide financial assistance. This can be for things like hospital bill reductions, food vouchers, housing allowance, and more.

    Baby savings plan printable

    baby essentials checklist and baby savings plan worksheet tracker printable

    Now that you know what to do month by month, use our free baby savings plan printable to stay on track.

    Fill in the baby bottle savings tracker with what you have now, then continue to mark your progress until you have a full bottle of savings that’s ready for baby’s arrival.

    We’ve also listed the monthly tasks so you can check them off as you go through them, so download our free printable and get to it!

    You’ll also get our single-page checklist of baby essentials so you can make sure you have the basics to care for your little one through the first year.

    There’s no sign-up required to access the printables. All we ask is to help us share our post to benefit other expecting mothers and fathers. Thank you!

    Please "SAVE" or "SHARE" this free resource so others may benefit:

    Click Button to Download Files:


    One of the best ways to welcome your new baby is by figuring out how to prepare for a baby financially with a sound plan. New parents should work on preparing for a baby well before the due date. Planning for a baby financially doesn’t have to be overwhelming. Follow our month-by-month sequence of how to plan for a baby to figure your costs and strategize how to save.


    • Download our baby savings plan and essentials checklists (look for the green box)
    • Determine how much money you currently have and how much you still need to save
    • Create a plan and start saving!


    sylvia wu aka mama chang headshot


    Sylvia, aka Mama Chang, is a personal finance blogger out to prove the possibility of navigating high-cost living on a low-cost budget. Paid off college and condo in her 20's on under $55k salary. She wants to teach others how optimize money to maximize quality of life. Dual income with kids, based in Hawaii.

    Hangs out on Keeping Up with the Changs: Pinterest