Having a baby can fill your house with love. It also can take a toll on your finances.
And you can expect the costs to keep growing right along with your baby. In fact, according to a 2025 estimate, it can cost almost $30,000 a year to raise a child.
That means you’ll likely have to reconfigure your household budget through the years (and then contemplate higher education expenses). If you break down the process and do a little at a time, it can make the task less daunting.
Read on for tips on getting started with the budgeting-for-baby process.
Key Points
• Raising a child can cost up to $30,000 or more a year, so assess household income after taxes and deductions for accurate budgeting.
• Consider loss of income and benefits if a parent stays home.
• Use the 50/30/20 budget rule for needs, wants, and savings.
• Prepare for upfront costs like nursery furniture and hospital bills.
• Child care is often the biggest ongoing expense.
Assessing Your Income
As you create your budget, begin by looking at your household income after taxes and other deductions come out of your paycheck each month. That’s the money you have to work with, not the gross amount.
Also, if one parent plans to stay home with the baby full- or part-time, plan your budgeting accordingly. Be sure to consider the loss of any non-cash forms of employee compensation, such as insurance and retirement contributions. If those go away, the amount of money in your bank accounts will likely drop, which is something to plan for.
Looking at Your Current Expenses
Some things won’t change at all, but there may be costs that will go down or go away after you have the baby. For example, the amount you spend on date nights, dinners out, and travel might be reduced for a while.
If one parent decides to stop working, their wardrobe budget might drop. But you’ll also be adding plenty of expenses. And then there are some forgotten expenses, like maintenance for your home, yard and car, you’ll need to factor in.
This is a good time to identify your priorities and be prepared to make some trade-offs to curb spending. For instance, can you live without some of those streaming subscription services? Can you make coffee at home instead of going out?
Planning Ahead For Recurring New Expenses
Here are some of the expenses that will often turn up once you become a parent.
Child Care
Typically, child care is the biggest ongoing expense for a family with a new baby. The cost will vary depending on where you live, the type of care you choose, and whether you need part-time or full-time care, but according to the Care.com 2025 Cost of Care Survey, national averages ranged from $343 per week for a child-care center to $827 for a full-time nanny.
Feeding
Even if you plan to nurse the baby, you’ll need to prepare for the possibility that breastfeeding might not work out and formula could become a regular expense. A BabyCenter study in 2025 found that formula can cost $222 or more a month.
When your baby starts on solid foods, typically at about 4 to 6 months old, you’ll add to that expense.
Diapers
The average baby uses 2,500 to 3,000 diapers in the first year. That could add up to about $839 to $1,000 a year in disposable diapers.
House and Car
Maybe you’re lucky enough to have an extra room in your home that’s ready to be transformed into a nursery. And maybe a baby car seat will fit into your current ride without a struggle.
But if that’s not the case, and you have to make some adjustments for your growing family, you may have to add more expensive house or car payments to your get-ready-for-baby budget.
Recommended: How to Manage Your Money Better
Miscellaneous Expenses
You’ll need to furnish a nursery for your baby, which can range from several hundred to several thousands of dollars. You’ll also need a car seat; stroller; high chair; toys and books; pacifiers, tiny outfits and socks; lotions, shampoos, and creams — the list goes on and on. This is where you can prioritize.
You may get some of these items at your baby shower, and friends and family might supply you with some hand-me-downs, which will help save money on clothes and cut costs. But there will still be plenty of items you’ll need to buy.
Preparing for Some Upfront Costs
Depending on your insurance coverage, you could be going home from the hospital with a bundle of joy and a bundle of bills. Check your health insurance plan to gauge what your costs could be. To give you a sense, many new parents end up paying about $3,000 in out -of-pocket costs for pregnancy and delivery.
The amount of your hospital bill will depend on a lot of factors, including the part of the country in which you live, the size and location of the hospital, the length of your stay, and how much extra care you or your baby might require.
You’ll also need some starter equipment — a crib, changing table, dresser, and a baby monitor, for instance.
Smaller ticket items include a diaper bag and pail, a baby bathtub, bedding, and towels. Here’s another place where hand-me-downs and resale shops can help you save.
Recommended: Savings Calculator
Ready, Set, Transition
Remember those current expenses you thought about letting go of, like fancy coffees and some streaming services? You don’t have to wait until the baby arrives to make changes. You might want to practice by giving your new budget a test run before your delivery date.
To take it a step further, if one parent plans to quit working, even for a short while, you could start living on just one salary a few months early and put the extra income into an emergency fund. That money could come in handy later when unexpected expenses crop up.
Recommended: 5 Ways to Achieve Financial Security
Overwhelmed? Take Baby Steps
Preparing for a new baby, especially your first, can be exciting. It also can be a little overwhelming.
Doing a few breathing exercises may help reduce any financial stress you’re feeling as you’re working on your budget. Starting now with baby steps could help get you on track well before your little one arrives.
The Takeaway
The cost of raising a child can be as much as $30,000 a year (or even higher). As you plan for parenthood, it’s wise to develop a budget and see where you can economize. Hand-me-downs can help you save on purchases, and building an emergency fund can help you if an unexpected expense crops up. Having the right banking partner can also help you manage your money well as your family grows.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
FAQ
How to budget when you have a baby?
One good system for assessing your new spending style once you have a baby is to use the 50/30/20 budget rule. That means 50% of your take-home pay goes to needs, 30% to wants, and 20% to savings or additional debt payments. As you see how much your baby-related expenses are, you can update your budget, trim spending as needed, and find a balance.
What is the biggest expense for having a baby?
Often, the biggest expense for having a baby is child care. The exact amount will depend on where you live and what kind of care you opt for, but costs currently can range from, on average, $343 to more than $800 a month.
How much are diapers a month?
Typically, diapers can cost $70 to $80 a month, though figures can vary depending on the type your choose and where you live.
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