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Budgeting for a New Baby

ASB April 03, 2019 | 5 min read N/A

Are you expecting? Congratulations!

Welcoming your keiki into the world is a major life milestone. As many parents will tell you, the unconditional love you experience for your child is unlike any other. When you discover you have a baby on the way, your excitement may be overshadowed by the sheer amount of tasks you must accomplish to prepare for your new family member’s arrival. On top of doctor visits and preparing a nursery, you also have to consider the impact on your financial situation.

Not sure where to start? American Savings Bank is here to help! We understand you’ve got a lot going on and the last thing you may want to think about is how to budget for baby. Take a look at our guide below for a few useful tips and tricks you can cross of your list and get you prepared, right away.

ASB baby


Perhaps you’ve been sailing smoothly on your current budget for a long time, or maybe your current budget is already facing some strain. Either way, you’ll want to reevaluate your existing budget before baby comes. It’s best to think ahead and consider all of the new expenses that come with raising a child.

New expenses that you didn’t have before might include daily necessities like diapers, large one-time expenses such as a crib, and ongoing costs such as childcare and doctor visits. Just remember, your first year of parenthood is likely to be one of your most expensive. As your keiki ages, needs and expenses will change. So, while you might be worried about the cost of childcare, remember that your child will eventually need to start school. Additionally, the cost of formula and diapers will transition to school lunches and clothes.


Having a baby almost always requires taking time off – and that often results in a drop in income. One way you can prepare for this sudden change is to factor this into your budget and plan accordingly. If you or your spouse plan to return to work after maternity/paternity leave, you may have to play for daycare or a nanny. Or, if you or your spouse decides to take a break from work and be a stay-at-home parent, you’ll then lose one income in your household completely.

To prepare for this shift, go through your expenses and see where you can cut down on your spending. Some expenses will be easier to slim down than others. Going out to dinner or on date nights, for example, will likely be cut down when the baby comes, simply because much of your free time will go to caring for your child. Your home loan payment or rent, on the other hand, can’t exactly be chopped in half due to a lower household income.

Once you’ve gone through your expenses and reduced as much as possible, you can use the money from your second income as a savings booster until the baby comes. Not only will this allow you to practice living on less, but you’ll have the nice bonus of a savings account that can serve as a baby emergency fund.


You already know that your baby’s needs are going to add to your monthly expenses. However, there are several ways to save on baby items. Daily necessities like diapers or baby food can be bought in bulk to reduce cost. You may be able to find large items, such as a dresser, in your local classifieds, discount stores or online marketplaces. Consider reaching out to friends or family members who have had children and may no longer need baby items.

You can easily save on the things your baby needs, but you can also save by restraining yourself from purchasing unnecessary baby items. As cute as they are, name-brand baby shoes really don’t give your child any benefits. Additionally, you might be tempted by expensive items like a high-end stroller when you can get one that serves the same purpose for half the price.


Many new parents jump right into saving for college. This is a great idea, of course, but don’t lose focus of your needs as well as those of your child. When planning your long-term financial goals with a baby on the way, don’t forget about yourself. Instead of putting all of your savings into a college fund, remember to distribute some money to your liquid savings accounts and retirement funds.


Becoming a parent is an exciting time in your life. With a baby on the way, your financial health is more important than ever before. Get started on your financial planning needs early by speaking with ASB’s friendly financial planning team. We’re here to help you plan for a happy and financially stable future with your growing family.

Note: Please be aware that the effect of inflation over time could have an impact on your savings plans.