How To Prepare Financially For Baby

You might think of me as sort of an expert when it comes to budgeting with the YNAB method, but I’m more of an expert with babies. We just had our sixth. And we prepared financially for her and she’s awesome.

I’ll let you in on a little secret, preparing financially for a baby, is no different than preparing financially for anything—the fundamental principle is to think long and act now.

What will things be like in nine months? Start to paint a picture which will determine the steps you take now. As you project into the future, you will have some new priorities, and you want to be ready to channel your money toward what matters most and remove as much potential stress as possible. How can you act right now, so that your Future Self with your Future Cute Little Baby will be ready?

You will have plenty of new stresses with the baby, you don’t want finances to be one of them. A couple things to think through as you look ahead:

Medical Costs

Call your insurance company and ask them what you can expect when you’re expecting. (See what I did there?) Call the hospital, same drill. Make sure you have a good grip on what the deductibles will be and how it is all calculated. Don’t forget that there are often medical costs leading up to the baby as well. Talk with the doctor, ask questions—do everything you can do to avoid being surprised and plan accordingly.


Sounds silly after “Medical Costs” but, boy, do you go through a lot of diapers. I am already anticipating in the comments, people saying, “Jesse, what about cloth diapers?” Well, we gave them a hard look and then we walked away. And you know what, you could really save money if you went with cloth diapers. That’s the best option to really save money. You buy them once and reuse them over and over again. It’s a one-time investment, it pays off especially if you have a lot of kids in the pipeline, but for us, we didn’t even consider it until the sixth so the ROI was way low.


If you have a mother-in-law, you don’t have to worry about it. She just buys all the baby clothes and that works. But if you do have to worry about it, that’s one more to think about. These babies grow like weeds and you just have to keep fitting them with all sorts of cute clothes, not really white onesies, right? I think those are great and super cute, but we always end up with something a little more involved (and expensive).


I’m not concerned about how much the baby will eat, as much as what you will eat when the baby comes and your entire household comes to a screeching halt. For those first two, three, four weeks, you may be eating out more than normal because you just don’t want to deal with it. So, plan for more eating out or plan ahead and start freezing meals. Different strokes for different folks, but the point is be realistic and plan ahead.

The Future

And then there is college and cars and weddings. Don’t get overwhelmed thinking about it now, but the sooner you think about it—the sooner it is on your radar, in terms of priorities—the better.

In Conclusion…

If you’re expecting a baby, congratulations! It is awesome. I love it. Nothing better in the world. Be sure you are thinking long and hard about how things will change, how it will affect your budget, and what decisions you can make now to make it easier. You might have to say no to some things today in order to say yes to new things in nine months. It will be so worth it.


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