Having a family

Budget planning for a baby

6 min read

Having a baby has a big effect on your lifestyle. Most new parents have to cope with less income and new expenses. One way to help deal with this change is to have a household budget ready for when baby is born. That way you can start making decisions now to prepare yourself for having more love, but less money.

A budget shows you:

  • How much money you earn
  • How much money you spend
  • How much money you have left over

Follow the steps below to plan a monthly budget for when baby is born.

Step 1: Make a household budget before baby arrives

By making a budget before baby arrives, you can work out how much you can save each time you get paid. This could help make life easier once baby is born, and when there may be less money coming in.

  1. Pick a recent one-month period to look at in your household bank statements.
  2. For each item in that month, put a letter next to it for the category it belongs to. Such as Debt (D), Savings (S), Regular expenses (R), Other expenses (O) and Baby expenses (B).
  3. When items occur more or less than once a month, work them out to monthly figures. So, quarterly items are divided by four. Weekly items (like the weekly groceries) are multiplied by 52 (number of weeks in a year) and divide by 12 (number of months in a year).
  4. Total up the expenses for each category and write them in column one of your budget.
  5. Add up all of your spending (totals for all the categories) and write the total next to TOTAL SPENDING.
  6. Work out your surplus or deficit (amount spare, or amount over-limit) by subtracting TOTAL SPENDING from Income.

Check out an example of what your results could look like here.

Step 2: Plan the changes to budget when baby arrives?

Using the Baby Expenses and What Can I do? section below, revisit your budget sheet, using column two.

Remember: Basics such as your groceries or household costs are likely to increase when baby arrives. Also remember each baby is different. You won’t completely know what you and baby will need until they are born. However, you will have options when it comes to organising your finances – and this planning gives you a head start. So keep going!

Step 3: Update your budget – income and spending changes when baby arrives?

Take three! Now it's time to go back to your budget sheet, and take changes you’ve written into column two and use them to update column three. An example of what this looks like is seen here.

Baby expenses

The first year of baby’s life can come with expenses. Here’s a few of the things that you may have to look at with approximate allowances:

  • Baby bath - $20-$50
  • Bed time (cots, blankets) - $1,000- $1500
  • Baby clothing (0-12 months) - $300-$400
  • Baby feeding support (eg. bras, breast pads, creams) - $300
  • Formula / Bottle feeding - $1,000
  • Solids - $450
  • Reusable nappies (including wipes, pins, cleaning powders buckets, liners, fitted nappies, creams) - $700-$900
  • Disposable nappies (including wipes, creams, fitted outers) - $1,400- $1,650
  • Change table - $150 - $300
  • Baby clothes - $200- $450
  • Travel gear (Including push chairs, car seats) - $700-$1,200
  • Oral care - $50-$100
  • High chair - $100-$400

Tips to make life easier

Here are some handy tips to help you prepare for a change in lifestyle. It's always worth having a chat with other people in your antenatal group, or with your family and friends to learn more tips and tricks for helping your money go further.

Start saving
The more money you can save before baby arrives, the easier life can be once baby is born. Remember even $20 per week over the space of a year could give you around $1000, enough to purchase a big ticket item without resorting to debt.

Don’t buy everything at once
It can be tempting to get everything before baby arrives. As every baby is different, it can be cheaper to wait and see what baby actually needs.

Have a think about:
• Accessories for different feeding styles or even nappies. Baby may respond differently
• Baby travel options - features in your buggy or pack may not end up meeting your needs
• Changing options - you may find a changing mat/blanket or towel on the floor might be the option for you
• Clothes and toys - wait for gifts you may receive at baby showers or from family and friends and then make your list of requirements after that

Protect your new family by getting insurance
Life, income and health insurance could provide financial help for your baby should anything happen to you. Find out more at Sorted. You should also think about making a will if you don’t already have one. You can find out more here.

Hire or buy second-hand
Babies grow fast, so they will regularly need new clothes. Sometimes second-hand clothes are a good option. Second-hand might also be a good option for other things like sleep or travel options. Look out for baby fairs, community fairs or Trade Me for second hand gear. Remember to check for signs of previous damage in second-hand gear you buy and also remember baby’s health and have items either cleaned or sterilised before they go into service.

Borrow what you can
The best deal is to get baby items free, by borrowing from friends, family, and neighbours. Use the time before baby arrives to ask around (because you will have your hands full after!). When baby is born, you can join (for a small fee) a local toy library and borrow toys and games for free.

Have a garage sale
Now could be a good time for getting rid of old items or junk to make space for baby. Instead of throwing things out, have a garage sale or sell them online.

Print out a copy of your Planning for a Baby Budget Guide here.