The first year with a baby brings one-off purchases, new monthly costs and, often, a dip in income. Planning each separately makes the total much less scary.
1. One-off purchases
Car seat (buy new, so you know its history), crib or bassinet and mattress, stroller, baby carrier, changing supplies, a few clothes in each size. Hand-me-downs and second-hand items work well for clothes, toys and many bigger items; the car seat and mattress are the usual exceptions people buy new.
Tip: list everything with a price, then mark what friends or family may give you. Buy the rest in stages; a lot of gear is not needed for the first few months.
2. New monthly costs
- Diapers and wipes.
- Formula, if you use it (this can be one of the largest lines).
- Childcare, if you return to work (often the biggest cost of all; get quotes early, waiting lists can be long).
- Health insurance changes: adding a baby to a plan can raise the premium.
- Larger grocery and utility bills.
3. Income changes
Check what parental leave pays, for how long, and whether it is paid or unpaid. Many families see a temporary drop in income at exactly the time costs rise. Building a cushion of the expected shortfall before the due date helps a lot.
4. Admin that saves money
- Update your budget for the new monthly costs before the baby arrives.
- In the US, look at a dependent care FSA during open enrollment if you will pay for childcare; it lets you use pre-tax money for eligible costs.
- Review life insurance and make or update a will.
Put it together
One-off costs (minus expected gifts) + 12 x the new monthly costs + any income gap = the first-year number. Divide what is left to save by the months until the due date.
Free tools
- Baby cost calculator: https://smartbudgetsheets.surge.sh/calculators/baby-cost-calculator/?utm_source=mataroa
- Savings goal calculator: https://smartbudgetsheets.surge.sh/calculators/savings-goal-calculator/?utm_source=mataroa
- Emergency fund calculator: https://smartbudgetsheets.surge.sh/calculators/emergency-fund-calculator/?utm_source=mataroa
- Debt Payoff Planner, up to 8 debts (Payhip): https://payhip.com/b/PtBLU?utm_source=mataroa
- 42 free budget templates, pay what you want ($0 is fine): https://smartbudgetsheet.gumroad.com/l/ngpkrb?utm_source=mataroa
General information, not financial advice. Figures are rounded examples.