Budgeting for a Baby in YNAB

Three Different Ways to Create a Baby Budget in YNAB


Once you get past the initial excitement of planning the perfect pregnancy announcement and daydreaming about itsy bitsy baby clothes, the reality of having a baby begins to set in—particularly when it comes to the future of your finances. 

From delivery to childcare to college costs, welcoming your mini-me into the world can feel overwhelmingly, intimidatingly expensive if you think about it too much. 

For a lot of people, the solution to that is to just try not to think about it. At all. 

Although tempting, that’s not the optimal strategy. You’d really just be trading a little bit of planning for a lifetime of simmering anxiety with occasional panic about the next upcoming (and possibly unattainable) money milestone. I’m not telling you how to live your life, but that’s a terrible trade. Unless you’re into absolute chaos, then rock on, my wild friend—you’re going to love parenting. 

The good news is that I’m about to deliver some better ideas, with options that fit your budgeting style. Whether you’re the Michaelangelo of budgeting—with every detail accounted for—or the Jackson Pollock of money matters—with stuff just kind of thrown around but probably all there—it’s possible to create a baby budget you can stick to for the long term. 

Get Realistic About What Matters

When you’re just starting out on your journey to parenthood, it can be easy to get caught up on the little things—like teensy tiny pajamas and little baby hats. And that’s cool! And fun! And also important! Babies need that stuff too. 

But don’t forget that you’re about to raise a full-blown human being here. An individual who will be experiencing the world and navigating life both with and without you. A real person. 

(No pressure though, it will be fine, I swear.)

So ask yourself: What do you really want for your family and what are you willing to skip or skimp on to get it? Is Lilly Pulitzer crib bedding essential to your vision of an ideal family life? Does your newborn really need Nikes? Think about how you can save and when it’s worth doing.

(And maybe your newborn really does need Nikes. That’s up to you!)

There’s no right answer to this one; it’s a choose-your-own-adventure book and you’re the person turning the pages. However, your budget can serve as the map that helps you navigate those intentions.

Here are three different budgeting examples to help you make it happen:

Option 1: Every Little Detail Budget

Some people love every element of the planning process and actually enjoy the activity of budgeting. If you’re looking forward to tracking every expense and planning for all possibilities, you might want to go all out with your budget set-up. 

Keep things clear by making multiple baby-related category groups, such as Medical Expenses, Baby Gear, Childcare, Special Occasions, etc. Then create detailed categories for each. For instance, a category group like Medical Expenses may include: prenatal care, ultrasounds, hospital delivery, OB fee, OTC meds and supplies, and baby copays with dollars assigned to each category. Like this:

Create a super detailed baby budget with several different baby-related category groups and specific expenses as categories.
Detailed Budget Example

Option 2: Broad Categories Baby Budget

If you prefer a more visually streamlined budget, you might opt for one category group dedicated to all of your baby-related expenses, with more general categories within that group. 

So in this budget example, medical expenses, baby gear, childcare, and special occasions might end up as categories that serve as buckets for any random expenses that relate to those topics, instead of listing every possible inclusion separately:

Streamline your new baby budget with one "Baby" category group and more general categories.
Category group for broad baby expenses

Option 3: One Catch-All Baby Category

If you prefer your budgeting to be as quick and as easy as possible, no judgment here. In fact, when we asked the YNAB team how they did it, the veteran parents preferred this option: just keep your budget the same as it’s always been and add one catch-all category for unexpected baby-specific stuff. 

Simplify your baby budget by adding one catch-all category for all baby expenses.
One catch-all category for baby expenses.

So, baby-related medical expenses? Those go in the general Medical category. Baby clothes? Yep, covered in Clothing. Diapers and formula? Those count as Groceries. Baby announcements and thank you cards? Funded from that brand new Baby category because you didn’t know where else it would go.

Playing Tag…with Expenses

While you’re thinking about your parenting future, it doesn’t hurt to come up with a few eye roll-worthy jokes in advance either. Play the long game by tagging each expense with the child it relates to so that you can figure out which kid was the most expensive. Maybe present them with a Most Expensive Child trophy on their 18th birthday. Mail them a lifetime invoice on their 21st. Our founder, Jesse, came up with that idea—we’re pretty sure his wife wasn’t on board. 

On a more serious note, if you plan on having more kids, it could be helpful to keep track of specific expenses like prenatal care, delivery fees, and diapers so that you have a data-based estimate of how much another baby could realistically cost. 

No matter how you choose to structure your budget, or which categories you decide to fund, don’t forget that you’re having a baby! You’re growing a person! You’re going to have drawers full of precious little clothes, and a warm little bundle that smells delicious after bath time, and a lifetime of memories to make!

Create a plan, but enjoy the process. It’s all kind of a big deal. 

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