A Complete List of the Best Money Tips for New Parents

Written By Accounting-Degree.org Staff

You're having a baby! Congratulations! Now how are you going to pay for it all? Most families will spend nearly a quarter of a million dollars on their child in the first 17 years of life. That's a lot of diapers and food, but fortunately, it doesn't come all at once. Still, parents need to do all they can to save money while still providing a great life for their child. We've compiled a lost of the best money tips out there for new parents, from financial planning to saving on baby gear.

Planning & Saving

Creating a budget, asking for help, and maintaining a safety net are all simple steps that can make a huge financial impact when it comes to baby expenses.

  • Graciously accept help and gifts: Friends and family are certain to want to help with a new baby, and although it can sometimes feel like an intrusion, help is a blessing. Allow them to share gifts, hand-me-downs, and baby gear before birth, and welcome help within your home after the baby comes. Family meals, babysitting, and even house cleaning are a great help and can relieve much of the financial burden that comes with having a new baby.

  • Talk to your partner about what's happening: Your dreams are turning into reality, and now it's time to make real decisions. Assume nothing and talk out the big financial questions with your partner before the baby comes.

  • Whittle down debt before the baby comes: Now more than ever, it's a great time to get your debt down. Knock out debt, and you'll be able to free up room in your monthly budget and contribute to financial stability before the baby comes. Make small sacrifices like eating out less, being careful about baby spending, and putting off a new car purchase to help finance your debt payments.

  • Maintain an emergency fund: Maternity leave, unexpected expenses, even job loss can all create major financial hits for new parents. Set aside a reserve of at least $1,000 in a savings account to cover life's unexpected expenses without having to resort to credit.

  • Create and maintain a budget: If you don't have a budget now, it's time to get one. And if you have one, it's time to add baby costs to your budget. Consider health care, child care, gear, and the daily needs of baby as they figure in to what you can afford.

  • Cut back on entertainment: You may enjoy nights out at the movies now, but new babies can be quite entertaining. Don't underestimate the amount of time that you'll spend watching your new bundle of joy develop. Regular outings may be cut back to find a major savings in your budget. Also, keep in mind that babysitting is now an entertainment expense: someone has to watch your little one while you're out blowing off steam.

  • Try to live on one paycheck: If you and your spouse are both working, try one paycheck on for size. You can of course keep working, but whittling down your expenses can help you pay down debt and save money, while also demonstrating whether or not you can survive if one parent decides to stay home with the baby.

Food & Gear

Baby gear, food, clothes, and toys all vary widely in their expenses, so this is a great way to find areas for savings. Buy used, generic, and get as much free stuff as you can to save big time.

  • Don't be shy about baby showers: It may feel a little awkward to enjoy a party where you're showered with gifts, but trust us, most family and friends want to do it. Register for the gifts you want and need the most, and your friends and family will be happy to buy some of them to help out and celebrate your new addition.

  • Find free and discounted stuff: Loads of freebies, coupons, and giveaways are available for babies. You can get sample sizes of diapers, formula, baby food and more, often just for signing up for a newsletter. Coupons can be a big help, too. Plan your purchases around coupon schedules and stock up when it's a good time to buy.

  • Avoid designer duds: Investment pieces like purses, shoes, and watches are great for adults, but there's hardly such a thing for babies. Baby gear like shoes, PJs, and even strollers will be used for such a brief time, it's not financially savvy to spend extra money on them.

  • Make your own baby food: Babies are just small people, and they don't need highly specialized food. Around four to six months, your doctor will recommend that you start feeding your baby solids, and they don't have to come from a jar. It's easy and healthy to blend up your own baby food mixes. And you don't need to buy specialized baby food processors: a blender or food processor that you already own will work just as well.

  • Shop online: With online shopping, it's amazingly easy to not only compare baby products, but find the best prices. It's also great for saving time, sparing the hassle (and swollen feet) of spending hours in big box shops. Even if you plan to buy in person, doing online research can help you find the best price and determine which retailer has the item for you. Retailers like Amazon also make it easy to buy regularly through monthly subscription services that offer a discount.

  • Buy items you like in bulk: Before baby comes, it makes sense to buy items like formula and diapers in small quantities. That way, you can find out which ones work best for your family. But once you've found a favorite, buying in bulk is a great idea, allowing you to have a stockpile and save money at the same time.

  • Find kids-eat-free specials: Newborn babies may not benefit from kids-eat-free nights, but once they start eating grown-up food, free meals are a great way to save money while dining out.

  • Consider cloth diapering: Babies need diapers, and diapers cost money: around $3,000 to $4,000 for each baby. But families who can cloth diaper can save significantly on diapering costs simply by washing and wearing diapers over and over again.

  • Question whether baby items are truly necessary: Wipes warmers, video monitors, and expensive diaper bags are nice to have, but not necessary. Take a look at your shopping list and consider what you can do without, or find a less expensive version of. A good rule of thumb is whether or not an item existed a few years ago, or when you were a baby: somehow, babies survived without this product!

  • Plan splurges wisely: If you can afford a great stroller, or playpen, but not both, think carefully about which one makes the most sense for you to splurge on, and which one would be fine in a lesser model.

  • Never underestimate the power of Craigslist and Freecycle: Babies grow quickly, and that means many families are ready to let go of baby clothes, toys, and even formula babies have outgrown for cheap or free. Check out your local baby section on Craigslist of Freecycle to see what's available.

  • Don't turn your nose up at thrift stores: Maternity clothes and baby items are not used for very long, so often, they're still in great shape by the time they make it to thrift stores. Just be careful not to buy safety items like car seats, which should always be purchased new. Garage sales are also a great source of lightly used baby items.

  • Sell your stuff, too: You may want to save some baby gear for future siblings, but if there are items you're willing to part with, they can mean cash in your pocket. Sell your clothes and baby gear to thrift or consignment shops to get money back. Or, you can donate them to charity and enjoy a tax break.

  • Use the cheapest brand that works: For some babies, only the most expensive diapers will do. But others will do just fine using inexpensive generics. Try them out to see what works for your baby.

  • Repurpose old household items: Some of the best toys are already in your home. Old call phones, calculators, and remote controls with batteries removed can become excellent playthings.

  • Buy bigger clothes: Baggy onesies may look awkward on a newborn, but once your child reaches the stage of separates, buying one size (or more) ahead can give you more wear out of clothing pieces. Let tees go a little long, roll up jeans, and use the elastic pulls inside of pants. Just be sure to buy shoes in the proper fit for good walking development.

Child Care

Whether you're going back to work or staying at home, at some point, you'll need a babysitter, even if it's just for date night. Here's how to make the most of this expense.

  • Ask family for help: If you're lucky enough to have grandparents or siblings living near you, don't hesitate to ask if they'd be willing to take on occasional (or even regular) babysitting time. You may feel like you're taking advantage, but many family members are happy to take on extra time with a grandchild, niece, or nephew. Just be sure to show your gratitude.

  • Share a nanny: If you have just one child, it may seem like one nanny is more than enough for your family. Why not add a few more kids to the mix and share a nanny with another family? You'll save money, and your child will get to spend time with other kids on a regular basis.

  • Consider home day care: If you're planning to stay at home with your child, you'll almost certainly be missing out on income. if you're comfortable, you can make up for it by caring for other people's children in your home. It's a great way to make a small income, and fun for your child to be around other kids.

  • Shop child care now: Take a look at all of your baby care options before birth, when you're less likely to have time to drive all over town visiting child care centers. Find out their details and costs, and consider whether or not they allow for part-time care.


Hospital deliveries, formula, and doctor visits all add up. Here's how to save on the health necessities your baby needs.

  • Review your insurance: You'll be adding a new dependent to your insurance soon, how will that have an impact on your premium? Call your insurance company to find out ahead of time so that you can budget and assess your options.

  • Breastfeed: It's not for everyone, but don't knock it till you've tried it. Breastfeeding can save money in more ways than one. There's no need to buy formula, and for those who don't pump, no need to even purchase bottles. Plus, research has shown that breastfeeding has certain health benefits for both babies and moms, potentially saving on health care costs.

  • Take all the samples you can get: Your hospital and pediatricians' office has tons of samples for formula and possibly even other products. If you're not already breastfeeding, take whatever they're willing to give you so that you don't have to buy it later.

  • Pre-pay for doctor and hospital costs: Even with great insurance, new parents will likely be expected to pay $1,000 or more out of pocket for maternity care and newborn delivery. Pay for them before baby comes, and you'll be able to spread out the expense. Use flexible spending accounts, and you'll even be able to enjoy a tax savings.


College is a far off dream right now, but 18 years can fly by faster than you think. Follow these tips to get started for college right now.

  • Start now: You will never have more time to save for college than right now. Aim to start saving before your baby is even born. It doesn't have to be much, but with time on your side, a small amount can grow and contributions can be ramped up later.

  • Know what you're up against: Check out financial cost calculators to find out what basic college costs are likely to be when your child heads of to school. With this figure in mind, you can work toward a realistic goal.

  • Ask for savings instead of stuff: Grandparents love to outfit their grandkids in the latest toys, shoes, and clothes, but many kids are already stocked up. Instead of frivolous purchases, ask grandparents to make contributions to a college fund in the form of savings bonds or 529.

  • Sign up for Upromise: With the Upromise program, you can earn a percentage of your credit card and grocery store purchases back. The earnings are deposited into Upromise, which can be used for college expenses. It's small, but over 18 years, can add up to a lot.

  • Don't forget your own needs: While time is on your side for college savings, if you're behind on the bigger financial picture, hold off on making major contributions to your child's college fund. Make sure that you have your basic expenses taken care of, as well as your emergency savings and retirement planned for before you invest hundreds in a college fund each month. Consider making a small contribution until you're ready: some plans can be set up with as little as $15 a month.

  • Break college expenses into thirds: Financial expert Jean Chatzky recommends breaking college expenses into three pieces: one funded by college savings, one funded by parents at tuition time, and the final one taken on by the child in the form of scholarship, aid, loans, or working in college.

Financial Planning

Babies can be expensive in the short term, but don't forget that they're around for the long term. You'll need to provide insurance and financial support for at least 18 years. These tips can help you get on the right path.

  • Know your benefits: Parental leave benefits can vary greatly by country and employer. In the U.S., employers are not required to provide paid leave, but many do. Before your due date nears, be sure you know your options and have a plan in place for how you'll handle the first few months after the baby comes.

  • Think about the unthinkable: If you or your spouse (or both of you) were to pass away, what would happen to your child? No one wants to think about such a situation, but it can happen and must be planned for. Set up life insurance for both of you, and take care of basic estate planning including appointing a guardian for your child and preparing a will.

  • Know your deductions: Parents can claim babies as an exemption, write off medical expenses (including travel costs to and from the doctor), a child tax credit, and childcare costs on taxes, adding up to a big savings.