Budgeting for life with your baby

baby pig
baby pig 

A new baby pulls on your purse strings as well as your heart. Taking time to think about how to prepare your finances as well as the baby’s nursery will ensure that when your new addition arrives, you and your bundle of joy are all smiles, as well as being financially prepared.

The good thing is you have up to nine months to prepare - and the key is to have a plan so you’ll be ready for the change in finances that comes with your new arrival.

Have a money plan

Whether you're a new mum or expecting your second (or third) child, it's important to rework your money plan to find out what impact a new child will have on your expenses.

Before the baby comes, try paying off as much debt as you can while you’re still earning. The less debt you have when your income is reduced, the better your financial situation will be.

Think about what you need to save up for and what items you might be able to borrow. Your plan needs to include the major one-off purchases you’ll need for a new baby, such as a pram and a cot. With a baby in the house there will be new ongoing costs like nappies, baby clothes and childcare, which also need to be in your money plan. 

Regularly reviewing your budget will help you cope financially with the changes so you can embrace your new lifestyle and family life.

Try out your new life 

One of the most significant adjustments is living on a reduced income – whether that’s going from two incomes to one, or perhaps having to resort to a benefit if you’re raising your child alone. Depending on your priorities and lifestyle, you could be living on a reduced income for a reasonable amount of time. 


Practise living on one income if one of you plans to stay at home with the new baby and use the money saved to buy baby necessities.

Counting on childcare

Childcare is likely to be one of your biggest expenses. If you and your partner both plan to work, the second salary may be used up paying for creche or a nanny. It's worth finding out if you'll be eligible for government payments which help cover the cost of care - use the estimate calculator on the Department of Human Services website.

If you live near your family, you can think about talking to them about whether they might babysit for you while you head back to work on a casual or part-time basis.

You can also talk to your friends about a childcare swap. It’s a simple way for all of you to save on childcare costs and you’ll get to enjoy some time being 'child-free'.

Saving strategies

Find creative ways to save money for when you are on a single income. Babies quickly outgrow clothes, toys and books and don’t appreciate that you bought the latest baby fashions.

Start a ‘pass it on’ system for baby gear with your family and friends who also have children.

Renting is a good idea for car seats and other equipment that your baby won’t need long–term, and you can use toy and book libraries.

It’s also worth finding out all the payments you may be entitled to. Visit the Department of Human Services website for details.

But, remember: a baby's biggest need is love – and that’s free.

Top tips when expecting

  • Start your money planning now, don’t leave it to the last minute.
  • Consider how your new baby will impact your income, work and childcare arrangements. Keep in mind that childcare is likely to be one of your biggest costs.
  • Plan for living on a reduced budget.
  • Consider the changes to your household and lifestyle, like the potential need for a bigger vehicle or extra space at home.
  • You may be tempted to spend lots on baby items, but consider letting friends and family know what’s on your still-to-get list, and borrow or rent wherever you can. 

Talk to other parents about finances and swap saving tips in the Essential Baby forum

- Essential Mums