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Having a Baby on a Budget

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I know this may come as a shock to some of you, but kids can be expensive!  Some surveys (apparently written by people who buy their kids EVERYTHING) tell you it costs $11,000 per year to raise a child.  Unless you have a child with LOTS of special needs, I just can’t understand that.  Anyway, that’s not what this article is about – since we’re expecting baby number 2, I want to piggyback off of an article Stacy recently published about how to be ready to take home a baby from the hospital without having payments in tow.  She gave many good points (a few I’ll reiterate) and there’s a few I want to put out there as well.  Two things let’s get out of the way first: 1) having a baby is NOT a financial emergency.  Unless I’m missing something, you’ve got at least a few months to plan for things.  2) having a baby IS something you can plan for (financially) and should.  Trust me, you’ll already have enough “stuff” to haul around with a new baby.  It is amazing the quantity of stuff out there you use to care for something so little!  Let’s not add a payment book to it too.  So how do you plan for that baby’s impact on your pocketbook?  Here are 5 tips:

  1. If you have insurance or something similar that provides maternity benefits, check what coverage you have.  This means making a phone call or two and finding out your maternity benefits and your maximum out of pocket.
  2. Ask questions.  Whether or not you have maternity benefits, talk to the hospital or birthing center you plan to use and get their rates and payment options.  Talk to your OB doctor and be up-front about what you intend to do.  They’ll think it is a little weird that you’re an all-cash baby-buyer, but they’ll appreciate you as well.  This also means asking in advance if there are ways to save money along the way or if there are charges you can avoid.  Hint: there almost always are ways to save some money if you ask and plan in advance.
  3. Since you should have a fair idea of when your deadline is, do the math.  It’s likely you have at least 7-8 months to plan once you learn you’re pregnant, so if you’ve done steps 1 and/or 2, you should know what your cost will be and can do some simple division.  If you find out your expected cost for baby’s birth is about $1,500 and your maximum out of pocket with insurance is $5,000 per year, you’ve got some immediate goals.  Assuming you have 7 months before baby arrives, that means your minimum savings amount should be $215 per month ($1,500/7) and your ultimate savings goal should be about $715 per month ($5,000/7).  Yes, that is a HUGE amount to save each month, but that’s why it is a GOAL.  With Annie, we spent about $1,700 total because there were no major issues.  Scrape together whatever you can.
  4. Be ready to make a phone call when the bill comes.  With Annie, we saved an immediate 20% on our final bill (in other words, we saved a few hundred dollars) by simply calling and asking for a discount when we were ready to pay the bill.
  5. Don’t assume you need every toy, gadget and other THING to bring home baby.  You need a car seat, a few blankets and some diapers, as well as a LOT of love, patience and energy.  Everything else is icing on the cake.

Having a baby is a wonderful blessing.  Having payments on baby is not.  Just like any other big expense that may come your way, PLAN.  If God is granting you the blessing of a new baby, set a wonderful example of how weird you can be and pay cash for baby!


*This post is linked at Homestead Barn Hop at The Prairie Homestead, at Frugal Days Sustainable Ways at Frugally Sustainable, at Proverbs 31 Thursday on Raising Mighty Arrows, at Works For Me Wednesday at We Are THAT Family, at Frugal Friday on Life as Mom, and at Frugal Tuesday Tip on Learning the Frugal Life.

Comment Policy: I love hearing your thoughts and input on what I write. Since I write about what works at my house, what pleases my handsome hubby and darling children; I'm sure we'll disagree sometimes. In those cases, do what's right for you and yours. As with any form of communication, please only post comments that move the discussion in a positive direction.

About Barry

Barry is the husband half of the Stacy Makes Cents team, responsible for all the marketing, website development, sanity management and taste testing. Barry writes about personal finance issues, helping people get out of debt, live on a budget and make the most of every cent that comes into their hands. He is the author of From Debtor to Better: The Details of Debt and How to Get Out! and writes periodically on his own site, Debtor to Better.


  1. Great post! I didn’t learn until recently that you can have your bill reduced by paying cash. All you need for a baby are clothes, diapers and loving arms. :-)

  2. Becca C says:

    I’m betting you that $11k is including the cost of formula, because, Heaven forbid anyone wants to feed their kids FREE boob juice! I bet that would knock off quite a bit of money.

  3. I had an at home birth with a midwife for my last two children. I was surprised that the insurance covered it. I bought most of the items I needed from garage sales and estate sales…large items were usually given at baby showers. Kids didn’t need alot because we either made it or made due with what we had!

    • You’re very blessed! Our insurance does not cover home births. :-) Make do, or do without.

      • Veronica says:

        Did you look into a midwife anyway? I’m not sure if our insurance covers midwives, but the midwife’s price is cheaper than giving birth in the hospital (with insurance)!
        But in some states, home births are still illegal– blows my mind!

    • Barry would rather me not birth at home. :-) He’s okay with me laboring there as long as I can, though.

      • My first two children were born in the hospital. Second two children were born at home. I was at different times in my life for both births (mentally). I was grateful for all the experiences I had. Each served its purpose. We actually didn’t have it to save money. I had a friend who had a home birth and she was sharing with me her experience and how it changed her. So I did research, my husband and I talked about it for quite a long time and we felt it was thae path we needed to go down. I was shocked that the birth was covered by the insurance. We called the insurance company and found one representative that we worked with and it was covered. Would we have done it if it hadn’t been covered…I’m not sure.

        • Yeah….insurance is sticky. :-) Thanks for sharing your story!! I love that you’re happy with all your births, no matter where they were at.

  4. I have always been befuddled by the claims that children are ridiculously expensive. My oldest is twelve and is only now really starting to cost money, mostly because she grows every five minutes and has a variety of things she wants to do.
    I was going to write a long response, but I think I’ll turn it into a blog post instead! :)

  5. These are great tips! We start saving before we are even pregnant. We don’t do anything to prevent pregnancy, right now, so having a baby is always a possibility. We start pushing funds into our “baby fund” as soon as my body begins to show signs of fertility after ceasing to nurse. Btw, we have a 15 month old. This gives us more time to save and even possibly have the money in place before baby is even conceived!!

  6. Twinkle says:

    Congratulations again!!!

    For a first child, people think they need *everything* they hear. We actually managed to not listen to the masses and didn’t spend an exorbitant amount of money. We cloth diapered, used baby carriers instead of a stroller, co-slept, breastfed, made our own baby food, did early potty training (sometimes called E.C.), etc. Not only is our son healthier, but we are closer because of it.

    Homebirths are even less expensive than hospital births and the risks have been exaggerated by the medical profession and media.

  7. Christina says:

    My youngest is 2 months old. We didn’t even have to ask for a reduction in the bill, they told us up front that if we paid our expected part in 3 days we’d save 20%! The thing that threw us for a loop was our insurance changing part of the way through the pregnancy. I think in the long run it turned out better, but that was a stressful month having to learn what our new coverage was going to be!

  8. I’m so glad I live in Canada because we don’t have to pay any medical expenses here. Otherwise, I agree that the media really encourage new moms to buy excessive amounts of useless stuff. The other day, I heard a co-worker was buying an $80 diaper bag. What???? It’s a BAG, people! And you can get them free from Nestle anyhow. Or use any number of other types of economical options!

  9. We paid cash for both our babies’ births, too. And you are so right that they don’t cost nearly as much as people think! Especially the second/third/etc because you can re-use a lot of the stuff.

  10. I just found out about paying with cash, too! That’s a crazy amount of money. I’d also say that if/when you’re buying toys, you don’t have to buy a lot. But make sure they’re varied. Baby doesn’t need 7 stuffed animals. Stuffed animals are good, but so are rattles, blocks, toys where you have to fit things in and out, etc., etc.

  11. I love this post! No kids yet, but my husband and I are working hard to get out of debt. We enjoy planning ahead for children. Lord willing we will pay cash for our baby one day! (May even have him/her at home.. We shall see.)

  12. says:

    This might seem weird but I have come to a conclusion….parents-to-be should start saving way ahead of having kids for the possibility that their child will have special needs.

    The new numbers out on autism are 1 in 68, loads of other kids have learning disabilities, food allergies, therapy needs…these things all cost big money. Some early interventions are free (First Steps goes from birth to 3) but many things are not and they are mind blowing financially.

    If you never need to use the money for dyslexia tutoring ($55/hour, 2 hours a week for my oldest) or for a special diet for a gluten intolerant kid or for a special school…awesome, use it for college!

    I wish this had occurred to us when we were both working and didn’t have kids. We could have offset a good bit of our bills over time..that would have been awesome. Or even used it to pay down our house earlier, leaving room in the budget for the $130/hr, 1 x a week sensory specializing physical therapist. She helped him, though. Worth it…but so expensive.

    • I don’t think that’s weird at all! I think that’s VERY smart! :-) Thanks for leaving such a fabulous comment!

  13. I’m afraid i didn’t read all the comments (I have a toddler and a baby, so i’m multitasking constantly!)
    But my ways for saving money with a baby include things like shopping in charity shops/goodwill/thrift stores for clothes – you can find good quality, barely used clothes at knock down prices. Earlier in the week I bought 9 items of clothing for my baby in a charity shop for £4 (I’m in the UK, btw!). If you keep either a written mental list of what you have in what size, and what season it will be when your child will be in each size, you can easily decide when you see something, if it will be useful for you, and whether you want to buy it.

    But even cheaper than buying second hand, i would recommend passing things on to others and accepting hand-me-downs. When we had our first baby we were given a crib, changing table, baby bath, nursing pillow, tons of clothes and much more. All from people who had finished using them. I’m the first of 3 married sisters to have children, so i know my sisters with be using the equipment once we’re done (they’re both trying to get pregnant!). I’ve also passed bags of clothes on to friends from my old workplace and friends at church

    • Debs, we do the same thing here….and shop Children’s Consignment Sales. LOVE deals on kids clothes since they don’t wear them very long. :-) Thanks so much for the comment! Stop by any time!

  14. just wanted to let you know, when I saw you at wee-cycle and asking all those nosey questions, and saying “should I sell my baby gear?” Well apparently I had my own secret, I just didn’t know it yet. We’ll be welcoming our own bean in November. So I am soaking up all your valuable baby information, and very interested in cloth diapering this time around. I’ve been reading your old posts about it to brush up, but if you plan on offering any training or classes on that, I am game!

    • Well, I just want you to know that I’ve thought about you at least a million times. :-) I think I already knew your secret. 😉
      As far as the diapers are concerned, I’d love to help you! When we get settled in a new home, would you want to come over, see my stash and talk about all the options?

      • absoloutely I would! I have been collecting them from yard sales but am not really sure what I am doing. Then I also get the looks like I am insane when I talk about cloth diapering so I’d love to get your input on how to handle that too. Just let me know when you are ready to bestow your wealth of knowledge on me, and I’ll waddle on over. Thank you so much!

        • :-) I’m used to those looks. lol You’ll get used to it too. Every time they look at you weird, just think about the money in your pocket…that’s missing in theirs. 😉
          When you see that I’m finally in a new house, PLEASE give me a holler…my mind is shot and I might forget. :-)

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