How to Get Your Monthly Budget Ready for a Baby

There’s no getting around it: Having a baby will change your life. Whether it’s your first child or your third, the financial impact can be significant—and sometimes overwhelming.

The costs of raising a child today are higher than ever before. Based on estimates from the U.S. Department of Agriculture that have been adjusted for inflation, parents can expect to spend, on average, between $16,227 and $18,262 a year raising a child. This figure includes everything from childcare and education to food, housing, and healthcare.

While it may seem daunting, the good news is that you have the power to plan ahead, make adjustments, and manage those costs effectively. Follow these eight steps to get started.

1. Financial Changes to Anticipate

The average cost of raising a child varies significantly based on where you live. But no matter where you are, the outlays can be substantial. Beyond just the obvious costs of diapers, food, and clothing, there are less apparent expenses to consider—like potential changes to your work schedule and the impact on your long-term savings goals. So while it’s easy to focus on immediate spending, it’s also important to understand how raising a child may affect your financial trajectory over time.

2. How to Budget for a Baby: Start Saving Now

Preparing financially for your baby doesn’t start after the baby is born—it ideally starts well before. Saving ahead of time for your little one’s arrival will provide a buffer for those first few months when your expenses are likely to skyrocket. While there is no universal figure that will work for every family, financial experts recommend having at least three to six months’ worth of living expenses saved before welcoming a baby. This emergency fund will give you peace of mind when you’re navigating those unexpected costs. If you’re not quite there yet, consider cutting back on discretionary spending now to build up your savings.

3. Cut Back on Nonessentials

Budgeting for a baby is all about setting priorities. It’s time to separate your needs from your wants and make choices that will set you up for success in the long run. Review all your current expenses and categorize them as either essential or nonessential, asking yourself, “Is this something I can live without?” as you go. The goal isn’t to deprive yourself, but to identify areas where you can save and reallocate money for more pressing needs.

Some examples of lifestyle changes to consider include:

• Transportation: Carpooling or using public transportation can save you money on gas, parking, and car maintenance.
• Dining Out: Reducing how often you order in or dine out can be a significant money-saver. Try cutting back to once every two weeks rather than weekly.
• Fitness: If your gym membership is gathering dust, consider canceling it and opting for free or low-cost alternatives, like home workouts or local parks.
• Staycations: Instead of a pricey vacation this year, consider staying local and exploring what nearby areas have to offer. Not only will you save on travel costs, but you’ll also likely discover hidden gems in your own community.
• Subscriptions: How many streaming apps and monthly memberships are you paying for? Add up all of your monthly and yearly subscriptions (across streaming, tech, gaming, and learning) and see if you can’t whittle it down by at least half.

By making these small sacrifices, you can create a much-needed cushion for baby expenses.

4. Pay Down Debts

Before your hungry new mouth arrives, consider paying off or reducing high-interest debt like credit cards or personal loans. According to the Federal Reserve, U.S. household debt reached an all-time high of $18 trillion in 2024, and the burden of debt can quickly add up when a baby enters the picture.

By paying off debts before your child arrives, you’ll alleviate some of the stress of managing monthly payments. Plus, the money you were spending on interest can be redirected toward more important expenses, like healthcare or saving for your baby’s future. If you’re unsure where to start, consider working with a certified professional who can help you create a debt repayment plan tailored to your situation. (Using a debt consolidation calculator can also be a great tool to see if debt consolidation* is right for you.)

5. Shop Thoughtfully

Being a savvy shopper can save you hundreds, if not thousands, of dollars when preparing for your baby. Baby gear, for example, can seriously add up. There are one-time purchases like a crib, stroller, and car seat, as well as recurring expenses like food and diapers (you’ll need about 3,000 of the latter in the first year, according to Consumer Reports).

Here are some strategies to help curb costs:

• Buy secondhand: Kids are constantly outgrowing their clothes and belongings. Baby clothes, strollers, cribs, and even toys can often be found gently used at a fraction of the price—or even free! Online marketplaces and consignment stores are a good place to start.
• Use coupons and sales: Look for discounts on baby essentials. Many stores and websites offer coupons or run seasonal sales, and some even have baby registries that offer perks.
• Buy in bulk: Certain items, like diapers and wipes, can be purchased in bulk at reduced prices, often saving you money in the long run.
• Utilize free resources: Libraries and local community centers often offer free or low-cost events and activities for children.

6. Don’t Be Afraid to Ask for Help

One of the most overlooked ways to save money when preparing for a baby is to ask for help —and that doesn’t just mean emotional support. Parents often don’t realize that friends, relatives, and even strangers may be willing to help, especially when it comes to baby gear and childcare. Don’t be afraid to reach out.

Some ways to do this include:

• Having a Baby Shower: It’s not just an opportunity for you to celebrate your new arrival, but also a great way to stock up on items you need. Consider asking guests to donate to a diaper fund or setting up a registry containing the essentials.
• Networking in the Neighborhood: Asking around might turn up a family two blocks away whose baby just outgrew their crib, shoes, or bassinette.
• Finding Childcare Support: Could a relative help out with childcare once or twice a week? It’s worth asking—many grandparents or close family members would love to be involved and offer support, especially in the early stages.
• Joining a Parenting Group: Many local parenting groups have online platforms or in-person meetups where parents offer each other support, advice, and a sense of community.

7. Save For the Future

It’s never too early to start planning for your baby’s future. From braces and a first car to a wedding and a down payment on a home, the costs will only grow over time. That’s why it’s crucial to start saving as soon as possible.

For private school or college tuition, consider opening a 529 savings plan, which allows you to invest tax-free for your child’s education. If you invest $1,000 initially and contribute $100 each month, at a 6% annual return, you could accumulate nearly $41,000 by the time your child turns 18. Not bad at all! Learn more about 529 plans here.

8. Don’t Forget Estate Planning

While preparing financially for your baby’s arrival, it’s easy to overlook the importance of estate planning. In fact, studies show that many Americans don’t have a will in place, which means those families are at risk of leaving important decisions to chance.

Creating a will and setting up a trust are essential steps to ensuring your family and assets are protected. And now, thanks to Fifth Third Bank’s exclusive partnership with Trust & Will, getting both is easier than ever—and free to all customers.

Access this unique service here, or through Fifth Third’s mobile app. By acting now, you can ensure your loved ones are cared for, no matter what the future holds.

Having a baby is one of life’s most rewarding life events, but it’s also one of the most expensive. By understanding the costs, planning ahead, and being strategic with your finances, you can ease the transition and provide a secure foundation for your family.

What to Do Next

• Set up a 529 college savings plan for your new baby.
• Celebrate babies born on 5/3 and enter Fifth Third Bank’s sweepstakes for a chance to win money for your child’s future.