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6 Ways to Make Room in Your Family Budget For Your First Child

Posted by MoneyKey on June 20, 2019
make a new family budget when welcoming new baby

Welcoming a new child into the family is a big moment for any parent, especially if it’s your first one! Your life as you know it is about to change, and this change will touch a lot of different corners of your life. One area in particular where you’ll likely feel a big impact is your family budget.

According to 2017 survey, the cost of raising a child in its first year is around $21,000 for a household that brings in $40,000 a year, and that cost rises to $52,000 for a household that brings in $200,000 a year. And according to another report done in 2017 by the Department of Agriculture, it’ll cost an average of $233,610 to raise a child from when it’s born through age 17. This number includes things like food, housing, medical costs, and general childcare.

This clearly isn’t cheap for most families, especially if money is already tight. But if you’re welcoming a new child into your life, there are a few things you can do to prepare financially in advance. Here are six things you can do to make room in your family budget before you bring that bundle of joy home.

1. Create a new family budget

You might have a family budget set already, but if you’re welcoming a new addition into the family, you may have to make some changes in your budget. Try to look at all the changes that’ll need to be made to your financial goals and expenses when your baby comes home. Are you going to have to add a section dedicated to childcare costs? Will other areas of your budget go up, like your grocery bill?


family budget

You may need to start reducing or completely removing certain monthly expenses from your budget, like eating out for lunch every day or your afternoon trips to Starbucks. Take a hard look at your budget and make the necessary changes to accommodate your new baby.

If you need some more help cutting back on your monthly expenses, take a look at these tips to help you save each month.

2. Get baby supplies early

Before your baby arrives, start stocking up on supplies so you’re not scrambling for things like diapers and food at the last minute. If you’re planning a baby shower, you might want to consider having it early so you have a better idea of what you need to buy in advance.


As an example, you can start trying to make room in your family budget for bigger expenses like a car seat and a crib, while keeping an eye out for deals on smaller items like baby wipes, diapers, and clothing. Thinking about this stuff in advance can help you disperse your purchases over a longer period of time to ease the financial burden. If you’re looking for deals on baby gear and supplies, some of these savings apps might be able to help you out.

3. Start your emergency fund in advance

When a new (and expensive) child is coming into the household, sometimes even a well thought out family budget isn’t enough to account for every expense that might pop up over the years. When some financial emergency does creep in, it’s best to be prepared with an emergency fund.

For example, you may have already made room in your family budget for the increase in spending on things like groceries, diapers, clothing, baby accessories, and childcare, but there are plenty of other expenses that could come up that may be harder to plan for. This could be things like extracurricular activities or unexpected trips to the doctor.

work your emergency budget savings into your family budget

If you’re planning to take time off when the baby arrives, try to consider what extra costs will come up during this time, like household expenses, buying extra baby gear, and potential medical bills.

To prepare for these potential expenses, start the process of saving in advance. Maybe you’re putting aside 10 percent of your income for your emergency fund. See if you can double this for the months leading up to the baby’s arrival. Getting a few months ahead on your monthly expenses is a great place to start.

4. Plan your finances for your paternity leave

Whether you or your partner take off work when the new baby arrives, there’s a good chance that this time off will affect the income of your household and your family budget.

Start by figuring out what the plan is for when the baby comes. Who’s going to take time off? How much time off? And how will this affect your income? If you think your household income will likely be going down, you can try to prepare in advance by working more hours at work leading up to your leave, or working away at a side hustle to earn some extra money.

Remember that your new family budget should give you an idea of how much money you’ll need, and you may need to either cut out some of your monthly expense or start saving funds in advance to accommodate these changes.

5. Save for potential medical costs

Even with health insurance, the medical bills associated with having a baby aren’t cheap. The delivery cost at a hospital in the U.S. is $3,500 on average, and that’s for a healthy delivery. If there are complications in your delivery that require an operating room procedure, the average cost shoots up to $6,900.

make room in your family budget for surprise medical costs

If you want to be prepared, factor the possibility of having extra medical bills into your family budget, and make sure you add your baby to your insurance coverage. It’s also important to know what your health insurance deductibles and co-pays are for the labor and delivery process. You should also look for a pediatrician that’s in your insurance network.

If you do end up running into an unexpected medical bill that you can’t afford, consider taking out an installment loan to help you handle this expense between paychecks. 

6. Lower your debt

Swimming in debt can be tough, and in some cases, the longer you let it sit, the bigger the payments get. They can eat away at your income and could add to the stress of a new parent.

So before you welcome your new baby home, try to pay off as much of your debt as possible. By freeing yourself up from these liabilities, you can make room in your family budget for other expenses. This may also help you start to save more going forward.

Make space in your family budget for your new baby

Stressing over your finances is never enjoyable, and there’s a chance some of this stress will only grow when you bring a new baby into the picture. Money might be a little tighter, but the best thing you can do is to prepare as much as you can in advance. This means creating your new family budget, starting your savings early, and stocking up on baby gear ahead of time. The goal is to enjoy raising your new child while minimizing the stress you feel from your financial situation.

Do you have any tips for making room in your family budget for a new baby? Share below!


Disclaimer: This article provides general information only and does not constitute financial, legal or other professional advice. For full details, see MoneyKey's Terms of Use.

Posted in: Lifestyle

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