How To Cope With the Financial Challenges Of Having A New Baby

A new baby turns a family’s world upside. But in a good way. There is so much joy in a new life but if you’ve ever had a baby before, there is just no way to fully grasp the enormity of the life changes that accompany the event. Outside of the emotional, physical, and mental aspects of a new parent’s life, the financial end of having a new baby can also be life-changing. New parents may face unexpected financial challenges once the baby arrives.

Since financial issues are often a source of stress for any individual, it can be even more so when it occurs within a family of a newborn baby. Here are just some of the financial considerations relating to the first year of a brand new life:

Costs of Having a Newborn

Medical Costs

Having a baby costs a lot even before the baby takes its first breath. Medical considerations need to include all prenatal care, testing, labor and delivery, hospital stays, and any special treatments/circumstances that arise during a birth. There are also the additional expenses for newborn medical care, additional hospitalization and treatments if the baby has health concerns after birth, and the care of the mother post-birth.

Coping: Speak frankly with your doctor’s office about the expectation of costs for the pregnancy care as well as labor and delivery. Have the same conversation with your medical insurance provider. The only way to plan for the medical costs of having a baby is to get a clear picture of the out of pocket costs. While there is no true way to anticipate the unexpected costs associated with special treatments necessary in the event of health problems, it can bring you piece of mind to have established an emergency fund leading up to a pregnancy and subsequent birth.

Feeding Costs

While breastfeeding is an increasingly popular choice for new mothers, not all mothers can breastfeed their babies. Some will also opt to formula feed their infants by personal choice. The fact is babies need to eat. If breast milk is not available, formula will need to be purchased. As the amount of formula intake increases, so do the costs. Plus, some babies will require more costly formula if they have special health concerns. As the baby grows, they will advance to pureed baby foods, juices, and snacks. Whether you purchase the store-bought foods or choose to make homemade baby food, the costs will increase as the baby eats more.

Coping: It should go without saying that what you are feeding your baby should be of the highest quality. Don’t go discount on baby formula unless you are using manufacturer’s coupons at trustworthy retailers. Speak with your pediatrician about which type of formula is best for your baby should you not be able to breastfeed and then request as many samples as your doctor will provide. Search for coupons online and visit the manufacturer’s website for other incentives. Some companies have been known to provide free samples or even a free case of formula to families in need. Also, if someone asks you what you need, request gift cards to the places where you can purchase the kind of formula you need. Stock up on the gift cards and allocate the monies towards feeding costs.


Many families choose to use disposable diapers for the reliability and convenience. Disposable diapers cost a lot and will be an ongoing expense for two years or more of the baby’s life. Consider also that the larger the diaper size, the less diapers you will get for the same high price. For those who plan to use cloth diapers, there is still an ongoing expense of laundering and buying supplemental supplies (rubber pants).

Coping: A great way to spread out the costs of diapers is to start shopping early. Make a habit of picking up a new pack of diapers every month during your pregnancy. Get no more than two or three packs of the same size. A baby grows fast so you may wind up with too many of the wrong size. Also, inquire at the retailer where you bought the diapers about their exchange policy on diapers. Many will allow you to upgrade to a larger size at no cost provided the package is not opened. You can also check in with friends and family who have new babies. They may be overrun with open packages of diapers they can no longer use.


Babies grow fast. Unfortunately, many new parents will receive as gifts outfits sized to fit the baby during only the first few months. Parents end up with an overstock of tiny outfits that the baby grows out of in no time at all and must constantly supply weather-appropriate, right-sized clothing each time the baby has a growth spurt. Clothing will be an ongoing expense for the next 18 years. Like diapers, the larger the clothes size becomes the more expensive the items will get.

Coping: You will get a lot of free clothing as gifts in the beginning so start stockpiling the money you didn’t need to spend on infant clothing for new clothing needed later. One of the best things about babies and clothes is that they rarely have a chance to destroy them before they grow out of them. Used baby clothing is getting easier to find as more people are able to find creative ways to de-clutter their baby’s closet. Check out eBay for bulk clothing sellers, visit a neighborhood yard sale, or arrange with local moms to have a clothing swap. It also help to realize that babies need to be warm and comfortable and an extensive wardrobe full of pricey designer wear is absolutely not necessary to achieve that goal.


Where there is a new baby there is also usually a truckload of new supplies. Items like bottle and wipe warmers, bathtubs, toys, furniture, changing tables, swings, car seats, bounce chairs, baby towels and blankets, and strollers will begin to pile up. At some point during the first year, a majority of these items will no longer be needed or will need to be upgraded to a bigger size.

Coping: While not many people expecting a baby will heed this advice, one of the best ways to save on baby supplies is to not buy them until the baby needs them. The idea of stocking up doesn’t work here because 9 out of 10 times you don’t need half of what you bought. Go for the basics before the baby comes. Stick with a quality, affordable crib, stroller, car seat, and a comfortable rocking chair for mom. Have enough bottles and diapers on hand for the first month. As time goes by and you learn more about your needs and those of your baby, you can purchase items as they become necessary. If you are establishing a gift registry, check in with other moms with kids under one year. They will be most likely to remember the differences between wants and needs.


New parents usually cover the first few items on this list in their budget when planning for a new baby but few ever really account for the ‘must-haves. For instance, a cute little baby will be the subject of tons of pictures. Film and developing costs money as do the load of photo albums and picture frames need to house the precious memories. Include in mix professional pictures and a new parent can easily spend thousands on photography alone during the first year. A new parent can also go crazy on baby-related chotchkie they feel their baby must have. The baby industry is a constantly booming business because of its sentimental tendencies and the list of baby accessories is endless, unlike your supply of money.

Coping: This category is more about your spending philosophy than ways to find less-expensive options. Establishing a budget from the start of a new pregnancy in preparation for a new baby and sticking with that budget is the only-sure fire way to avoid overspending on useless items. Plan to dedicate all extra monies into the baby’s college fund. It will be money well-spent and an action that you will greatly appreciate later in life.

Child Care

Deciding whether to be a stay at home mom is not always an easy decision, nor is it possible for everyone. Some new parents only have a limited amount of time with their newborn before having to return to work. Childcare is a great consideration because it is an expensive but necessary evil. Finding good child care is a time-intensive process not necessarily based on cost. Childcare costs will last until a child attends school full time and may still be a factor during days school is closed or for after-school care.

Coping: Some new parents will be blessed with family and close friends that will provide daily care for the baby during the first year. For those who do not have reliable child care, you will need to research all of the facilities by dropping by during a busy time and speaking with the center directors about costs. If child care costs are way more than you can reasonably afford, check with local and state agencies that can offer information about subsidized programs. You may also consider how much you can afford to pay hourly to an in-home care giver. There are agencies or community groups that may be able to refer you to a quality provider in your area. Plan to add extra money into your emergency fund to ensure you have a back up to pay for child care.

About the author: Ryan Guina is a military veteran and former consultant for the military and Department of Defense. He writes at Cash Money Life, The Military Wallet, and around the web.


The cost of commercial child care can prove a huge expenditure for just one child (let alone two, or three, or four!). My husband and I found jobs that allow us to work different shifts from one another so we could avoid this expense entirely. I work days, he works evenings, and we both take Saturday off as our "family day" each week.

I realize not everyone can do this, but I am grateful that it worked out for us.


This is a wonderful post and hopefully will get people thinking before and not just after a baby arrives. One thing for sure is that babies are totally dependent so though they have no say they are impacted by those around them. I recently did a post regarding diapers that provides some of the pros and cons of cloth vs. disposable.

Penniless Parenting has a tab titled Babies Can Be Cheap that may assist those parents trying to figure out how to manage it all.

Babies are the biggest blessing one can have.


Regarding this comment: "Don't go discount on baby formula unless you are using manufacturer’s coupons at trustworthy retailers."

Baby formula is so closely regulated by the FDA that a store brand is no less safe or nutritious than the big brand ones. I don't necessarily trust teh FDA any farther than I can throw it, but in this case they err on the side of being TOO stringent (per the Infant Formula Act of 1980), to the point where the the recipes the companies use are all amazingly similar.

My wife and I have saved hundreds (probably close to $1,000) by buying the Costco brand (Kirkland) of baby formula rather than Similac or Enfamil. Sometimes a baby will get a fussy or spit up more than usual when you switch to a new formula, and if he/she does, then you may end up having to go back to the more expensive stuff. (Our younger baby spit up a lot at first when we switched to Kirkland, but that died down after a few days.) Otherwise, you're not giving up anything by going with a generic brand of formula.

Obviously, don't take medical advice from this comment, but you don't need to worry too much about buying cheaper formula!

More FDA info here:

More on the Infant Formula Act:

C in DC
C in DC

My neighborhood has two invaluable resources for parents - an excellent kid's clothing consignment shop and an excellent neighborhood parents yahoo group. The yahoo group is fabulous for swapping gear and clothes with other parents. We also have a couple of really good thrift stores with kids' stuff.


Jeremy, thanks for sharing this guest post with your readers!