Baby Budget: How New Parents Can Avoid Debt
- Raising a child costs money.
- Getting a handle on your income and expenses could help you avoid debt.
- Explore ways to reduce your costs, like buying secondhand items or stocking up on essentials.
Table of Contents
Free up cash each month with Freedom Debt Relief
Ozzy S., Freedom client²
“Right away, I had more money each month because of program costs so much less than what I was paying on my minimums.”
Having a baby is one of the most rewarding things you might do in your lifetime. It can also be one of the most expensive.
BabyCenter puts the average cost of baby-related expenses at $20,384 for the first year of a child's life. And while their figure includes some optional extras like college savings, it also includes costs that apply to most parents, like childcare, food, and other supplies, like diapers.
The last thing you want is the stress of debt while you’re adjusting to life as a new parent. Setting up a budget could make it easier to manage your new expenses without getting overwhelmed.
Here are some tips for setting up a baby budget and steering clear of debt during that first year of raising a child.
1. Determine What Your Income Will Be
If you’re having a baby, you may end up out of work for a time—possibly an extended one. If you’re taking only a few months off, find out whether you’re entitled to paid parental leave. If you plan to work part-time after having a baby, figure out what that will mean for your personal finances.
Keep in mind that if you don’t earn a very high salary, the cost of childcare may mean it’s not worth returning to work full-time. In 2024, the average cost of putting an infant into daycare was $343 per week, according to Care.com. You may be better off reducing some expenses and taking on part-time or gig work as your schedule allows if it means not paying for full-day care.
2. Have a Clear Understanding of Your Expenses
Having a baby doesn’t just mean paying for things like clothing and diapers. You might also face some less-obvious expenses. For one thing, you may need a larger vehicle to fit a carseat and a baby’s travel gear. That could mean taking on a larger monthly auto loan payment.
Also, if you’re juggling a job and a baby, you may not have much time to cook, leaving you reliant on takeout and meal kits that are more expensive than shopping for groceries. Consider all of your costs carefully when making a baby budget.
3. Find Ways to Lower Your Costs
Certain expenses in your baby budget may be unavoidable. The good news, though, is that there are ways you can save money on essentials.
Accept hand-me-downs
If you have friends or family members willing to pass along baby clothing and gear they no longer need, it’s worthwhile to accept it. Consider reaching out to your social and family network to ask. Babies tend to outgrow clothing very quickly, so if you don’t have to spend as much thanks to hand-me-downs, it frees up money in your baby budget for other things.
Purchase secondhand items
Aside from a carseat, there’s generally no issue with buying used items and gear for your baby. Instead of buying a new stroller, crib, high chair, and changing table, check out online marketplaces, local parent groups, and consignment shops. You may find some of the things you need at a significant discount.
Buy baby essentials in bulk
There are certain items in your baby budget you have to replenish regularly. These may include:
Diapers
Wipes
Formula
Buying these items in bulk could result in big savings. And you don’t necessarily have to join a warehouse club to find bulk items. You can often get these items in bulk online or in big-box stores.
Prioritize Emergency Savings Before Having a Baby
It’s important to have an emergency fund no matter your situation. But with a baby in the mix, it’s especially crucial to have money in savings for unexpected costs.
You may plan to return to work full-time, for example. But if your baby gets sick a lot and you’re forced to take unpaid time off, you might struggle to pay your bills. An emergency fund could help you avoid reaching for a credit card in a situation like that.
A good rule of thumb is to aim for a three-month emergency fund (meaning, enough savings to cover three months of bills). This also gives you protection in case you lose your job and it takes time to find a new one. But if that’s not doable, aim to save $500, $1,000, or another sum that’s reasonable for you.
A Comprehensive Baby Budget Could Help You Avoid Debt
Taking the time to set up a baby budget could help you steer clear of debt while navigating parenthood. And once you have the financial end of things handled, you can focus on caring for the little human you’ve brought into the world.
Debt relief by the numbers
We looked at a sample of data from Freedom Debt Relief of people seeking credit card debt relief during September 2026.
Credit utilization and debt relief
How are people using their credit before seeking help?
Credit utilization measures how much of a credit line is being used. For example, if you have a credit line of $10,000 and your balance is $3,000, that is a credit utilization of 30%. High credit utilization often signals financial stress.
We have looked at people who are seeking debt relief and their credit utilization. (Low credit utilization is 30% or less, medium is between 31% and 50%, high is between 51% and 75%, very high is between 76% to 100%, and over-utilized over 100%). In September 2026, people seeking debt relief had an average of 76% credit utilization.
Here are some interesting numbers:
Credit utilization for debt relief seekers
| Credit utilization bucket | Percent of debt relief seekers |
|---|---|
| Over utilized | 30% |
| Very high | 32% |
| High | 19% |
| Medium | 10% |
| Low | 9% |
The statistics refer to people who had a credit card balance greater than $0.
You don't have to have high credit utilization to look for a debt relief solution. There are a number of solutions for people, whether they have maxed out their credit cards or still have a significant part available.
Regain Financial Freedom
Seeking debt relief can be the first step toward financial freedom. Are you struggling with debt? Explore options for debt relief to regain control of your finances. It doesn't matter how old you are or what your FICO score or credit utilization is. Take the first step towards a brighter financial future today.
Show source
Author Information
Written by
Maurie Backman
Maurie Backman is a personal finance writer with over 10 years of experience. Her coverage areas include retirement, investing, real estate, and credit and debt management.
Reviewed by
Kimberly Rotter
Kimberly Rotter is a financial counselor and consumer credit expert who helps people with average or low incomes discover how to create wealth and opportunities. She’s a veteran writer and editor who has spent more than 30 years creating thousands of hours of educational content in every possible format.
Frequently Asked Questions
Are there apps for budgeting?
Yes. Several apps, including PocketGuard, Mint, You Need A Budget (YNAB), and Achieve's GOOD app, could help you set a budget. They might make it easier to track transactions and stay on top of your financial goals. Some apps smoothly link to your bank and creditor accounts.
What are the three Rs of budgeting?
The three Rs of budgeting align with the three Rs for environmental responsibility:
Reduce. Cut down your expenses, especially the non-essentials.
Reuse. Reuse what you have to avoid spending on new things.
Recycle. Get creative and recycle items to cut costs.
How long does it take to build an emergency fund?
Try to save the first $1,000 within six to 12 months. Be aggressive and make sacrifices. Challenge yourself to make a budget, find ways to save, and set milestones to reach and celebrate.
Here's how one family of four might do it if their goal is to save $2,500:
Drag everything unneeded out of the closets and sell it, netting $700
Give up two subscriptions: $40 per month
Shave 10% off the grocery bill: $60 per month
Switch mobile plans: $50 per month
Cut one restaurant dinner out: $100 per month
Cut 10% of driving: $25 per month
This family could reach their goal in under seven months.