How to Effectively Prepare for a Baby Financially

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Welcome Home, Baby!

Welcoming a baby into your home is one of the biggest blessings you will ever experience. As you hold that little bundle of joy, your heart will feel a warmth and love that is beyond words. As you wait in anticipation of your baby’s arrival, there are lots of things to think about and do – like getting the nursery ready and planning your work & maternity leave. Amongst the many things, one of the more important things would be to financially prepare for your baby.

In our last post, we reviewed and calculated HOW MUCH money you should save for a baby. In today’s post, we will go over the HOW… How to financially prepare for a baby. We go over two main topics:

  1. How to Prepare and
  2. Ways to Save

How to Prepare:

1. Complete a Baby Budget

The first thing you want to make sure you have is a completed Baby Budget which will include a checklist of essential needs to have for your baby and the cost for everything. You will need to prepare ahead of time your baby budget, figure out how much you’ll need to save, and add that as a line item on your regular monthly budget. If you haven’t already, you can get the Baby Budget Worksheet below.

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2. Save Money for Baby Budget

Once you know how much you’ll need to save up for your baby, you will want to put that money aside. You can earmark and make a note of how much to keep in your bank account for baby’s budget. To be safe, it would be a good idea to keep it separate.

You can create an actual “Baby Fund” jar and store it at home OR a better idea would be to create an actual savings account with the bank. Easily create new a savings accounts online with Capital One 360. I have done this in the past with different “Sinking Funds.” Here are a couple of options:

3. Review Health and Life Insurance Policies

Health Insurance

Now would be a good time to review your health and life insurance policies. Your baby’s arrival would allow you the chance to update your health insurance with your employer. By law, insurance plans must cover well baby check-ups, but depending on your plan, you may not have to pay for those visits. Double check if your plan is one of those plans.

Life Insurance

Do you and your spouse have life insurance? If you don’t, now would be a great time to consider getting a policy each for both of you, especially with your growing family. The best investment for your family would be both parents getting TERM LIFE insurance policies that would alleviate any financial burdens on the family should anything happen to any one of you.

When shopping around for the best policy, the best way to go about it is to go through an insurance broker. They will be able to shop around for you for the best deals from the different insurance companies. You can try and find a local broker, or check online. Here are two popular and helpful places to check:

4. Stock Up on Baby Necessities

You should stock up whenever you can on baby essentials such as diapers, wipes (those two are a must, unless you’re doing reusable diapers), baby soap, etc. You’re going to need to spend money on these items anyways, the more you can save now, and whenever there are sales, the better. You’ll have more money to put aside in your Baby Fund for other items. My thing is to always buy things on sale AND if you can, with promos and rebates. I’ll write more about this in the “Ways to Save” section.

5. Stock Up on Essential Household and Personal Items

Along the same lines as stocking up for baby essentials, you should stock up on household essentials such as toilet paper, laundry detergent, shampoo and conditioner, soap, toothpaste, deodorant, feminine hygiene, among other things you need. You are going to be so busy with taking care of your little one, that you may not have the energy to go to the store to grab something you ran out of.

Stock up now whenever there are sales so you don’t have to buy them at the last minute for full price. Again, the more you can save, the further your dollars will go!

Now that we’ve gone over five of some of the important things on How to Prepare financially for your baby, let’s go over some of the ways that you can save.

Ways to Save:

1. Child Care

Child care is probably the most expensive cost you will incur for your baby. There are a few options you have to help with this cost.

Stay Home

The first one would be to consider one parent to stay at home with your baby. I understand that there may be circumstances that would make this impossible for you. A drop in one whole income could be detrimental to your family’s finances.

However, in my experience, it can definitely be worth it. The biggest benefit would be that you know your baby is getting the best care that he or she can get, and you don’t have to worry about their safety and well being.

The one parent would not only have more time to care for the baby, he or she would have more time to do other things at home like cleaning, cooking, and having more time with older kids if there are older siblings.

My kids were exuberant when they found out that I was planning to quit my job and stay home to be with our newborn baby. So I say consider it, and before you make the leap, count the costs and see if you can cut your lifestyle down to be able to afford the change in income.

Subsidies and Financial Aid

There are numerous places where you can find subsidies and financial aid to help with child care. In Hawai’i, we have Child Care Connection Hawai’i that offers subsidies to qualifying families. Check with your state agencies to see what kind of programs are available to you.

For military families, there’s Child Care Aware of America that coordinates with on-base child care providers. If you don’t have access to those, you may be eligible for child care fee assistance programs.

Family or Friends

Is there a grandma, grandpa, aunty or uncle who is willing and able to watch your baby? Depending on your relationships, this could be an easy way to find child care or not. You know your family and friends the best.

If there’s a person you can think of, it might be a cheaper alternative to a facility and it could possibly be free (thanks mom!). Definitely consider the people who are closest to you who you can trust.

There are so many things to think about as you prepare to welcome your baby home. One of the most important things will be preparing for your baby financially. Read this post about how you can prepare and how you can save money before baby’s arrival.

2. Baby Supplies


If you will be staying at home with your baby, at least during the time you are taking off from work, one of the best gifts you can give your baby is the gift of nursing. It’s healthy for both you and your baby and it’s an amazing time of bonding. On top of that, you will be saving money on baby formula which can get pretty expensive over time.

If you are planning to go back to work, you can continue to provide your baby with breastmilk by using a breast pump. You’ll have to invest in a breast pump that will last as well as breastmilk storage supplies, however, you will save money in the long run.

Nowadays, some health insurance plans cover the cost of a breast pump or will give you a choice of free breast pumps. I already got one free from my health insurance that I plan to use when baby comes. Check with your health insurance; that’s at least $100 you may not have to spend!


Like I mentioned above, it’s best to stock up on diapers, wipes, and other household essentials during sales and promotions such as the ones at Target. And if you’re a mommy on a budget like me, you need all the savings you can get!

… if you’re a mommy on a budget like me, you need all the savings you can get! Click To Tweet

You can use paper or online coupons, partner that with sales and promotions, and if you time it right, get rebates on apps such as iBotta. Some people think you have to be extreme to get the best savings from couponing, and a lot of people think that couponing in Hawaii is impossible. That’s not true!

You don’t have to be extreme, and it is possible in Hawaii. I am living proof that couponing is possible in Hawaii and especially possible everywhere else in the US. Here’s an example of a time when I was able to stock up on diapers with all three – coupons, store rewards, and rebates:

At Walgreens – Pampers Diapers:
  • Sale: 2 for $18
  • Bought: 5 Pampers Cruisers and 1 Pampers Swaddlers
  • Used: $9 worth of Pampers coupons (paper and digital with the Walgreens app)
  • Paid:  $40.24, Received 4,300 in Walgreens Balance Rewards (= $4.30)
  • iBotta rebate:  5 x $3 back for Pampers Cruisers = $15
  • Overall savings:  $20.94 for 5 packs or $4.19 each (That beats the sale price of $9 each!!)

If you’re wondering how the iBotta rebate works, you just download the iBotta app on your phone, look for deals that are available from the stores you shop at (i.e. Target, Walmart, CVS, etc.). Add the deals, shop for the items, then upload your receipt. Your account should get credited within 24 hours.

You can withdraw your accumulated rebates when you reach the $20 threshold which is not hard to do if you’re buying stuff that you need anyways. Getting savings like that doesn’t have to be hard or complicated. You just have to know when’s the right time to shop for what you need.

I highly recommend following a couponing site to help you track the best time for stocking up on these items. The Krazy Coupon Lady (KCL) is a great one to follow. I have the app on my phone and get notifications whenever there’s a sale on any brands, stores or items I am interested in. It gives me a headstart to grab what I need from the store before the shelves are empty.

Find a couponing site that aligns with your preferences. KCL’s Target and Walgreens deals are great – that’s where I got all my diapers! – and they show you stock up prices so you can buy more when prices are at their lowest.

Free Baby Stuff

Rebate Key

A friend of mine recently introduced me to a website called, Rebate Key. You can get rebates for up to 100% back for stuff bought on Amazon. You would have to pay full price for the items, but you’ll get the % rebate back in 35-days (in case there are any returns) – your very first rebate payout would be in check and every payout after that can be to your PayPal account.

They post new stuff everyday, including BABY STUFF! I was able to buy a carseat canopy, nursing cover, cabinet safety straps, and a no-contact digital thermometer. I paid $71.74, but I’ll be getting $62.87 back – that’s $8.87 for all four items! You should check the site out for anything you may need for your baby.

Various Baby Sites

Here’s a list of sites where you can get free baby essentials as well. For each site, you just need to enter the code PJBABY and you’ll get the free item or $ off. You just pay for shipping.

  1. Baby Leggings – 5 Free Baby Leggings
  2. Breast Pads – 10 Free Breast Pads
  3. Belly Button BandGet 2 Free Belly Button Bands OR 1 Free Belly Button Body
  4. Nursing Pillow1 Free Nursing Pillow
  5. Carseat Canopy – 1 Free Carseat Canopy
  6. Seven Slings1 Free Baby Sling
  7. Udder Covers1 Free Nursing Cover
Free BabyLeggings Breast Pads Get a Free Nursing Pillow or $40 Off! $50 Gift Card for a Carseat Canopy! 300x250 banner Free Nursing Cover!

Other Ways to Save on Baby Items

  • Hand-me downs from older siblings, family, friends
  • Consignment

If you’re on a tight budget, don’t be afraid to ask around if anyone has used baby items that they no longer need. Most people save baby clothes. Family and friends who know you’re expecting are probably already thinking of giving their old baby stuff to you anyways. Don’t hesitate to receive those gifts because that’s more you can check off your baby check list.

Of course, you would want to sort through the items and decide whether some items are worth keeping and using and others are not. Be sure to wash and clean everything before you use them for your baby just as you would for new items.

3. Medical Care

Change health plan

If your current health plan doesn’t cover the cost of well baby check-ups, consider changing it to one that does. Also, how much is your co-pay? You’ll want to make sure it’s within a range that’s affordable for you in case your baby will need to see the doctor for sick visits. How about emergency room visits? You never know what kind of emergency your baby may experience.

Health Savings Account

Does your employer offer a health savings account option? If they do, this is a good option to set aside funds for health related expenses. The great part about HSA’s is that you can set the funds aside tax-free. If you don’t use all of your HSA funds, you can roll it over to be used for the following year.


See if your family qualifies for Medicaid and the Children’s Health Insurance Program. The program provides no to low-cost health insurance for children and teens which includes services for well child visits, immunizations, prescriptions, hospital visits, and mental health services.

If you qualify with your income, this is one way you can save money out of your pocket for health care costs. Of course, eventually, you wouldn’t want to be dependent on the program, but if your income qualifies, you might as well take advantage while you can. Use the extra money you save towards paying down your debts and setting yourself up for success in the future.

For more information on the programs, check out the Insure Kids Now website.

WIC (Women, Infant and Children)

WIC provides supplemental food and nutrition education to low-income pregnant, breastfeeding, non-breastfeeding mothers, infants, and children up to 5 years old. They provide vouchers for families to buy things such as milk, eggs, cheese, peanut butter, cereal, and other nutritional foods.

Final Thoughts

Well this has been another long post. I almost combined this post with my previous post which was also surprisingly long, so I’m glad that it was split into two parts. There was a lot of information shared though, and I hope you found it helpful. In conclusion, I’d like to recap what we went over. First, How to Prepare Financially for your baby – which included:

  1. Complete a Baby Budget and Checklist
  2. Save Baby money in a Savings Account
  3. Review Health and Life Insurance
  4. Stock up on Baby Items and
  5. Stock up on Household Items

And lastly, we discussed Ways to Save – including saving on:

  1. Child care
  2. Baby Supplies and
  3. Medical Care

If you know someone who could use this information, please share it!

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There are so many things to think about as you prepare to welcome your baby home. One of the most important things will be preparing for your baby financially. Read this post about how you can prepare and how you can save money before baby’s arrival.

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