How To: Adapt Your Parenthood Budget

Tips to Parenthood Budget

If you’re planning to start a family soon, or have a baby on the way, you must be wondering about how you’ll finance family life. Prepare to have your carefully crafted adult budget blown to bits by the arrival of baby; diapers, daycare and all those cute shoes cost money, after all. Can you afford it? Here’s a cost breakdown of common first-year baby expenses.

Newborn Baby Means New Expenses

Your bundle of joy will also introduce new ongoing costs to your new parenthood budget. Here’s what to start setting aside for now to minimize the cost of baby set up later.

Diapers: Prepare to pay an estimated $72 a month for disposable diapers, or about the same for a diaper service. Your child will wear diapers until about age three — the cost will dwindle gradually as your child potty trains and just wears a pull-up overnight. Savings tip: Buy no-name diapers for everyday use and a premium brand-name product for overnight (that’s when you need a reliable product!).

Food: If you breastfeed, your extra costs for your baby’s nutrition will be $0 for the first six months. Formula runs about $100 a month. After six months, babies start on solid foods. Savings tip: Puree your own vegetables and fruit to make your own baby food.

Gear: Babies need a lot of swag— or at least parents find such stuff helpful when caring for their child. You’ll need to invest in a good quality stroller, and probably a compact lightweight one too for travel and visits to the mall. A baby carrier, car seat, exercise saucer and toys will add up. Expect to drop $2,000 or so in the first three years. Savings tip: Solicit hand-me-downs for big toys. Buy a toddler car seat that converts into a booster. Choose your big items well in advance and request them at your baby shower.

Healthcare: Even if you have full drug coverage, you’ll inevitably spend money on health-related gear like a baby thermometer and humidifier. Gripe water, baby acetaminophen, and teething gels likely won’t break the bank, but you’ll be spending $20 a month or more on small drugstore purchases. Savings tip: Purchase no-name drug store items. Travel with lots of everyday medicines to avoid paying top-dollar when you’re away.

Clothing: Babies grow fast and those newborn clothes will be tight before you know it. You could easily spend a few hundred dollars in baby’s first year on sleepers, onesies and snowsuits. Savings tip: Even if your baby isn’t born yet, find a parent with a child who will be a year older than yours, and the same gender, and ask for hand-me-downs. Provided the children stay a size apart, that relationship can save you hundreds a year, year after year. Also, ask that grandparents and friends who like to buy clothes always purchase things too large so you get maximum wear.

Childcare: If both parents are returning to work, childcare will emerge as one of your biggest expenses. Full-time care for an infant can run as much as $1,500 a month, depending on where you live. Even after-school care for a child in full day school will cost $500 a month and more for summer camps. Savings tip: Part-time care or co-op daycares will cost you less and could be balanced with part-time work or with care offered from family members. (But in truth high quality childcare is worth every penny!).

Indirect Costs To Keep in Mind

When you are a parent, life changes. In your new monthly budget, take into account that more of your time will be taken up with caring for your child. You might not be able to put in as much overtime at the office, while household tasks and renovations may become more difficult, prompting you to hire others for what you may have previously handled yourself.

As well, kids take up space and having a family could inspire you to move into a larger apartment, condo or home over time. Meanwhile, when you want to head out to a movie or dinner sans child, you’ll need to pay for a babysitter, adding to the cost of going out socially or for work after work hours.

Unexpected Savings

There is a financial upside! When you have kids, you simply don’t go out as much, and as a result, your entertainment budget will go way down. A rental movie or bottle of wine will get you and your partner through a weekend, saving you hundreds in restaurant bills, movie tickets, cabs or parking.

While it can be pricey to take kids to the zoo or fairs, many things you do with children are free. Playing in the park, visiting the local outdoor pool and just playing in the yard or your living room can fill hours of relaxed, meaningful and low investment time that you’ll value in a very real way.

 

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