Having a baby brings new expenses and changes to your income, sometimes before you even bring your little one home. A little planning now can help you feel more prepared for what's ahead. These money tips for new parents cover three practical steps: creating a baby budget, planning for changes in income during parental leave, and building an emergency fund. You don't need to have everything figured out before your baby arrives. Start with what you can, and adjust your budget as you settle into life as a new parent.
With so many baby expenses to think about, it helps to break the list into two manageable groups: one-time costs you'll pay before or shortly after the birth, and ongoing costs you'll cover each month. You'll have a clearer idea of how much to set aside for your baby's arrival and what to make room for in your monthly budget once they're home.
One-time costs may include:
Ongoing monthly expenses may include:
Childcare can be a big monthly expense, and finding an available spot takes planning, too. Start by reaching out to a few local providers to ask about rates, openings and waitlists. Getting those details early gives you time to compare options and see how childcare fits alongside your other bills before you return to work.
Our free Baby Budget worksheet gives you a place to put those numbers and your other baby expenses together. Your first estimates don't have to be perfect. Start with what you know, then record what you actually spend once your baby arrives. After a few months, you can compare the numbers, see what surprised you and adjust where needed. Keep updating the worksheet as your baby grows so your budget stays useful for the family you have today.
When every baby ad makes another item sound essential, it's easy to feel like you need everything before your baby arrives. You don't have to buy it all at once. Focusing on what you'll use in the first few weeks can help keep your spending manageable.
Start with a car seat that fits your baby and is properly installed, a safe place for your baby to sleep, diapers, feeding supplies and a few weather-appropriate outfits. Add the basics for bathing and diaper changes so you have what you need to keep your baby clean and comfortable.
High chairs, nursery decorations and toys for older babies can usually wait. A play yard may be useful right away if it's your baby's safe sleep space. Otherwise, you can wait until you know whether you need one. Giving yourself time also lets you see which gifts or hand-me-downs are available before spending money on something new.
Before buying, ask yourself: Will we use this in the first few weeks, or can it wait? Secondhand items can help stretch your budget, but safety comes first. Check current safety guidance, recalls and the item's condition before using it. For a used car seat, make sure you can verify its history, including any crashes, and check its expiration date and the manufacturer's guidance. If you can't confirm it's safe to use, pass on it.
For more practical ways to make room in your budget, explore our guide to saving money on baby expenses.
If your budget is already stretched, adding baby expenses can feel like a lot to take on. Start with your current spending so you can see what your household needs each month before deciding where to make changes.
Write down your essential bills, including housing, utilities, groceries, transportation, insurance and debt payments. Then add your estimated baby expenses using the Baby Budget worksheet. Compare the total with your take-home pay to see how much room you have left.
If your expenses are higher than your income, look for a few manageable changes rather than trying to cut everything at once. You might pause subscriptions you rarely use, cook at home more often or put off a nonessential purchase. Even modest changes can help when you keep them up over time.
If you haven't made a budget before, our guide on how to create a budget can help you get started. You can also use the My Money tool in online and mobile banking to review your spending, track your budget and work toward savings goals in one place. It's a convenient way to check where your money is going without sorting through receipts or updating a spreadsheet every time you make a purchase.
It's also worth checking whether your family qualifies for financial assistance. First Alliance's free Benefits Finder can help you explore government benefits that may be available to you.
Before your leave begins, work out how much income you'll receive and which bills you'll still need to pay. Your regular paycheck may change during this time, so knowing the difference between your expected income and essential expenses can help you decide how much to save beforehand.
For example, suppose your essential expenses are $300 more than your expected monthly income during leave. If you plan to take two months off, you'd need about $600 to cover that shortfall. You may want to save a little more to account for unexpected expenses, too.
Next, find out which leave options are available to you. The details depend on where you live, your employment situation and your eligibility.
Not every parent has access to paid leave, and some families receive only part of their usual income. If that's the case for you, knowing the numbers early gives you more time to prepare. You might save a little from each paycheck, reduce some expenses before the baby arrives or reconsider how long you can comfortably take off work.
It's also worth planning how you'll keep up with bills while you're home with your baby. Setting up automatic payments for recurring expenses and scheduling reminders for bills that need your attention can help you stay on top of due dates during those busy first few weeks.
Saving money can be difficult when your monthly expenses are increasing, but you don't have to build a large emergency fund all at once. Start with an amount that fits your budget and make saving part of your regular routine.
A first goal of $500, for example, could help cover an unexpected copay or car repair without relying entirely on a credit card. If that feels manageable, try setting up an automatic transfer of $10 or $20 each payday. Small, regular deposits can add up over time, even when you can't put away much.
Keeping your emergency savings in a separate savings account can make it easier to keep that money apart from what you use for everyday expenses. You can also add part of a cash gift or tax refund when you receive one.
Once you've reached your first goal, you can gradually work toward saving enough to cover several months of essential expenses. How much you can set aside will depend on your income, bills and other financial priorities. What matters is building a cushion you can maintain without making it harder to cover your family's current needs.
Your financial plans should include more than the cost of diapers and childcare. After your baby arrives, take time to review your health coverage, insurance policies and account beneficiaries so they reflect your growing family.
Here are three places to start:
You don't have to tackle every financial task at once. Start with the deadlines that matter most, especially health insurance enrollment, then work through the remaining items as you have time.
For most families, it's a good idea to focus on current bills and a starter emergency fund before putting money toward college. Having some savings available can help you handle an unexpected expense without taking on additional debt or dipping into money you've set aside for other needs.
That doesn't mean you have to put college savings off indefinitely. Once your essential expenses are covered and your emergency fund is taking shape, you can look at setting aside a small amount for your child's future education. Even if you start with a modest contribution, you can increase it later as your income and budget allow.
The right balance will depend on your circumstances. Make sure your family's immediate needs are covered first, then decide what you can comfortably put toward longer-term goals.
Preparing for a baby involves plenty of unknowns, but your finances don't have to be one of them. By estimating your new expenses, planning for any changes in income and setting aside what you can for emergencies, you'll have a clearer picture of what your family needs and where you may need to make adjustments.
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