How to reduce the costs of having a baby

Is your excitement at expecting a baby tempered by financial worries? Read some quick tips to help you reduce the cost of having a baby. 

Having a baby is expensive. If you don’t have insurance, you can expect fairly hefty prenatal, maternal, and postnatal medical bills, and if you’re adopting then you’ll probably need to cover travel and legal costs. And that’s before you’ve forked out for maternity clothes, a bassinet, and a car seat.

To add to the pressure, many families don’t get paid parental leave, forcing them to go without a part of their income for several weeks.

So it’s no surprise to learn that a quarter of new parents are getting into debt. But while you can’t avoid some financial outlays and reduction in income when you become a new parent, there’s still a lot you can do to reduce the financial burden and save money. Here are some tips to help you reduce the costs of becoming a first-time parent.

Rent a one-bedroom apartment

It’s easy to be tempted to rent or buy a bigger home once you discover you’re expecting a baby, to give you a room for a nursery. But you can comfortably get away with renting one-bedroom apartment for some time with a young infant. In fact, child experts recommend that infants stay in the same room as their parents for at least six months.

Of course, a one-bedroom apartment is naturally going to have less space. Which means you probably won’t have room for a changing table, bassinet, chair for your newborn to sit in, and a pack and play for travel.

However, you can save space by buying a multi-purpose pack and play with changing table, rocker, reclined seat, and bassinet elements that you can use until your infant is five or six months old, or until you need an actual pack and play that you can take to work.

Look for ways to reduce daycare center costs

Whether you’re a single parent or two-income household, daycare costs will probably be by far your largest monthly expenses. According to Child Care Aware of America, the average cost of center-based infant daycare ranges from $5,045 to $17,082 a year, depending on which state you live in. (If you’re thinking of moving to Alaska you’re in luck, as it has some of the cheapest daycare centers.)

If you’re a couple, you may decide that one parent will leave work and stay at home with your child. It’s important to bear in mind that this arrangement will probably have a long-term, compounding effect on the stay-at-home parent’s career progression, contributions to Social Security, and retirement fund.

If you can’t afford, or don’t want to have one parent remaining at home, there are other options to help reduce the cost of childcare. You may, perhaps, negotiate childcare with neighbors and family members, or even club together with friends to hire a nanny between you. Don’t forget about state, federal and possible local care subsidies available, depending on your income.

Be clever when buying baby supplies

Once they have bought their first baby clothes for an expected baby, most Americans don’t invest much further. However, you can’t avoid needing to buy wipes and diapers.

You can, however, reduce your outgoings (and impact on the environment) by buying cloth diapers. You can also get second-hand children’s clothing easily. And, as babies grow so fast, many second-hand clothes clothes are usually brand new or barely worn.

You can also find ways to reduce your spending by researching ways to buy cheaper baby products online. Sites like are a good place to start.

Remember your Federal Tax Credit

Child tax credit is expected to rise to $2,000. This means that this amount will be reduced from your tax bill. So, if you owe less than $2,000, you’ll actually get some cash back. (This isn’t the only tax break available, but it is the only benefit with a dollar figure for every American!)

Make the most of your maternity leave

Once the sleep-deprived first few weeks have passed, many women find themselves with some free time and brain space – and look for creative ways they can earn money around their baby.

Many of the businesses we’ve featured on this website were started by mothers. And some were even conceived by women who met through their babies.

If you’re looking for business inspiration, or simply want to maintain your employability for when you do return to work, we recommend reading these articles:

Photo by Tim Bish