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.
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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 total household income.
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.
Insights into debt relief demographics
We looked at a sample of data from Freedom Debt Relief of people seeking debt relief during January 2026. The data provides insights about key characteristics of debt relief seekers.
FICO scores and enrolled debt
Curious about the credit scores of those in debt relief? In January 2026, the average FICO score for people enrolling in a debt settlement program was 593, with an average enrolled debt of $25,843. For different age groups, the FICO scores varied. For instance, those aged 51-65 had an average FICO score of 588 and an enrolled debt of $27,829. The 18-25 age group had an average FICO score of 556 and an enrolled debt of $17,051. No matter your age or debt level, it's reassuring to know you're not alone. Taking the step to seek help can lead you towards a brighter financial future.
Credit card debt - average debt by selected states.
According to the 2023 Federal Reserve Survey of Consumer Finances (SCF) the average credit card debt for those with a balance was $6,021. The percentage of families with credit card debt was 45%. (Note: It used 2022 data).
Unsurprisingly, the level of credit card debt among those seeking debt relief was much higher. According to January 2026 data, 88% of the debt relief seekers had a credit card balance. The average credit card balance was $16,010.
Here's a quick look at the top five states based on average credit card balance.
| State | Average credit card balance | Average # of open credit card tradelines | Average credit limit | Average Credit Utilization |
|---|---|---|---|---|
| Alaska | $18,904 | 7 | $24,102 | 81% |
| District of Columbia | $16,247 | 9 | $28,791 | 78% |
| Alabama | $13,021 | 9 | $27,261 | 78% |
| Oklahoma | $13,959 | 8 | $25,731 | 77% |
| Kentucky | $12,599 | 8 | $26,156 | 77% |
The statistics are based on all debt relief seekers with a credit card balance over $0.
Are you starting to navigate your finances? Or planning for your retirement? These insights can help you make informed choices. They can help you work toward financial stability and security.
Support for a Brighter Future
No matter your age, FICO score, or debt level, seeking debt relief can provide the support you need. Take control of your financial future by taking the first step today.
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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.
Are there apps for budgeting?
Yes. Several apps like PocketGuard, Mint, You Need A Budget (YNAB), and the Achieve GOOD app (Get Out Of Debt) can help you set a budget, track transactions, and stay on top of your financial goals. Some apps also let you link bank accounts 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, look for 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
Goal reached in less than seven months.