Cutting Down the High Cost of Raising a Baby

Asian Chinese baby girlWhether you’re trying to conceive or waiting on your baby’s arrival, you’ve probably heard that raising a baby is not the cheapest life decision you’ll make. In fact, in 2008 the USDA said the average family will spend almost a quarter of a million dollars ($221,190 to be exact) on a child from the age of newborn to seventeen.

That dollar amount alone can dampen the mood of even the most ecstatic expecting parent; but Sally Herigstad, CPA and author of Help! I Can’t Pay My Bills: Surviving a Financial Crisis, says parents shouldn’t be scared off by articles proclaiming it costs hundreds of thousands of dollars to raise a baby. “If that were true, none of us would have survived the child rearing years with finances intact.”

These tips will help you prepare for the financial responsibilities that come along with changing diapers.

  1. Know where your money is going. Long before your baby makes an appearance, you should know exactly what you spend each month. Neil Ellington, VP of Consumer Education Services, INC., says, “You can’t control your money if you don’t know where it’s going.” Most people, he adds, chronically under-estimate the amount they spend. To avoid this, create a spending log. Note fixed expenses, such as insurance and mortgage, but also track incidental spending, like that Starbucks coffee you love to sip. Use a simple notebook and a pen or utilize a spreadsheet program like Excel. “Whatever method you use,” says Ellington, “keep track of everything you spend for a minimum of 30 days.”
  2. Set financial priorities. Stuart Ritter, CFP, Senior Financial Planner for T. Rowe Price, says it comes down to setting priorities and ensuring your spending reflects those priorities. “If saving for college is more important than a big house with a backyard, then set up the 529 plan, contribute monthly, and use what’s left for your living expenses,” he says, adding, “Just recognize that all of your decisions are connected.” This means the kind of car you drive may affect where you live, which may affect how much you save for college, which may affect your vacations, and so on.
  3. Plug up the leaks. Eating out, impulse buys, and a pack of gum can start as a trickle, but leads to a waterfall. Says Ellington, once you figure out where the leaks are you can, “… put money back in your pocket, where it belongs.” Does this mean you can never buy fun goodies again? No; but while you’re planning for a baby, you may need to put a patch on that leak for a while.
  4. Prepare for an emergency. Ritter says there are three categories which bad things fall into: large, unexpected expenses, disability, and death. “To prepare for them, parents need three things,” which are:
    1. an emergency fund,
    2. insurance,
    3. and, instructions.

    The emergency fund should be equal to three to six months of expenses saved in a savings account or money market. “It will take some time (maybe a year or two, or more) to build that up,” says Ritter; but he adds, the funny thing about unexpected expenses is, “… they happen … well … when you don’t expect them.” So, get the cushion into place now. Disability and death, though unpleasant to consider, is best handled through insurance. Ritter says you need way more than you realize – in the ballpark of hundreds of thousands of dollars – and it costs way less than you may think, or around $50-$100 per month, which is about what you spend on cable or cell phone minutes you never use. Lastly, ensure you have instructions in case something happens to you and/or your husband. Where do the kids go? How will your money be used for them, and with what restrictions? When will they get the money? If you don’t write a will, says Ritter, the state will decide the answers to those questions, and more. “And you might not be thrilled with the results.”

  5. Create a baby budget. It’s tough to know how much you may spend once the baby comes; but by doing some research, you can guesstimate a budget for the baby. Ritter states day care is one of the highest costs associated with having a baby, whether it’s a direct cost incurred by paying someone or a lost salary of a parent who chooses to stay at home. Prepare for this before the baby arrives by determining what you will do about childcare after delivery and understanding the costs associated with that decision. Also, plan for items like feeding expenses, in case breastfeeding doesn’t pan out (or you decide not to do it at all); diapers, cloth or store bought; doctor’s visits, because you’ll be going for regular checkups during the first year; and clothing, which the baby will outgrow faster than you can change her bibs.
  6. Spend money on what you really need for the baby; skip what you don’t. The coupon giant RedPlum recently asked parents to identify the most overrated products for babies. These were the responses:
    • Wipe warmer – 101 votes
    • Bottle sterilizer – 16 votes
    • Diaper Pail – 11 votes

    Additionally, consider where you need to splurge and where you can save. Lisa Reynolds, Mom Saver-in-Chief at RedPlum, says, “Those newborn size clothes may be irresistible, but you can realistically start with 0 to 3 month.” Car seats should always be purchased new, however strollers and a dresser for the room, not so much. Says Reynolds, “All new cribs sold in the U.S. and Canada must meet federal safety standards, regardless of the price.”


  7. Save on necessities. All babies need diapers and clothes, but there are great ways to get these necessities at a lower cost. Coupons are available for store-bought diapers, so start stocking up while you are pregnant. Check places like,, and for deals. Clothing-swap with friends who have older babies, who have outgrown their wardrobes. Check consignment shops that cater to kids, as they often offer gently used brand name clothing and toys at a lower cost. Reynolds suggests organizing a book, movie, or toy swap with friends, saying, “Often times, there are great finds for your baby’s clothing and furniture at your local consignment shop.” She recommends using to locate the nearest consignment shop in your area.

What do you think?

Cutting Down the High Cost of Raising a Baby

Tell us what you think!


  1. mommy nhoj says:

    We didnt buy diaper pail and wipes warmer! When she was newborn, we used cotton balls and warm water. We only used wipes when we’re out of the house. Now, i wash her in the sink. We do have a baby budget and pretty on track with expenses.

  2. Jamila says:

    This is awesome for my husband to have so he understands how much it costs for having kids. And what is more important

  3. tangled says:

    Great tips!
    Good article.
    Cloth diaper is the cheapest way to go.
    secondhand clothes from newborn to 12 months
    Use a playpen instead of the crib

  4. I have a baby right now and I am currently pregnant and working on a budget is really hard! I worked really hard to make a budget.

  5. Heatherly says:

    I have met so many women that don’t want more than 1 or 2 children. They say "they are expensive." They really aren’t!
    Who says you need to stress right now about college expenses for them? They may not want to go.
    You don’t need to buy brand new clothes….used/consignment or friends that let you use their baby clothes is much cheaper!
    You tend not to go out to eat as much with little ones, so that saves money.
    They are not monsters that eat you out of house and home….you make adjustments and survive.
    You really don’t NEED an extra baby insurance.
    Forget the diaper genie! Put the diapers in a grocery bag and throw it in the trash!
    Buy a used crib but a new mattress.
    Sorry for the long tips!

  6. Brittney says:

    I buy diapers in the large boxes from wholesale, warehouse stores, or The items in 6 are not necessary at all, so don’t waste your money.

  7. Jess1477 says:

    dont need a wipe warmer or bottle warmer!

  8. meredith says:

    Glad I didn’t waste my time with the overrated products in number six, but we also could’ve done without a bottle warmer. We always warmed up bottles with warm water anyway.

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