A new baby brings immense joy—and significant expenses. From one-time purchases to ongoing costs and potential income changes, financial preparation makes the transition to parenthood smoother. Here's how to budget for your new arrival.
One-Time Baby Costs
Items you'll need before or shortly after baby arrives:
Essential Purchases (£500-2,000+)
- Cot or Moses basket: £50-400
- Pram/pushchair: £100-1,000+
- Car seat (required): £50-300
- Changing station/mat: £30-150
- Baby monitor: £30-200
- Initial clothing: £50-200
- Feeding supplies: £50-200
- Nappies and basics: £50-100
💡 Save Money on Baby Gear
Babies use things briefly. Buy second-hand for items like clothes, Moses baskets, and toys. Save full price for safety items (car seats) and things that get heavy use (pushchair).
Ongoing Monthly Costs
What to add to your monthly budget:
- Nappies: £40-70/month (less if using reusables)
- Formula (if not breastfeeding): £40-80/month
- Baby food (from 6 months): £30-60/month
- Clothing: £20-50/month (they grow fast!)
- Baby supplies: £20-40/month
- Healthcare: Varies (prescriptions, vitamins)
The Big One: Childcare
If both parents return to work:
- Nursery: £800-1,500+/month (London: £1,500-2,500+)
- Childminder: £600-1,200/month
- Nanny: £1,500-3,000+/month
Childcare is often the biggest expense after housing. Factor this heavily into your return-to-work decision.
Plan Your Baby Budget
Use iBudget to create a baby-ready budget and track new expenses as they appear.
Income Changes to Plan For
Maternity Pay
- Statutory Maternity Pay: 90% of pay for 6 weeks, then ~£172/week for 33 weeks
- Employer enhanced: Check your contract for better terms
- Maternity Allowance: If not eligible for SMP
Paternity Pay
- Statutory: 1-2 weeks at ~£172/week or 90% of pay (whichever is lower)
- Employer enhanced: Some offer more
Shared Parental Leave
Parents can share up to 50 weeks of leave and 37 weeks of pay. Consider whether this works financially for your situation.
Financial Preparation Timeline
As Soon as You Know (Months 1-3)
- Review your maternity/paternity benefits at work
- Calculate expected income during leave
- Start saving a "baby fund" for initial expenses
- Review health insurance and life insurance
Mid-Pregnancy (Months 4-6)
- Create a post-baby budget with reduced income
- Build up emergency fund
- Research childcare options and costs
- Start buying big items (spread the cost)
Late Pregnancy (Months 7-9)
- Ensure 3-6 months expenses in savings
- Stock up on nappies and essentials
- Prepare meals for the freezer
- Set up child benefit claim (after birth)
ℹ️ Child Benefit
Currently £25.60/week for first child, £16.95 for additional children. Claim it even if your income reduces it—you get National Insurance credits.
Adjusting Your Lifestyle
Some expenses naturally decrease with a baby:
- Dining out (babies don't love restaurants)
- Entertainment (evenings at home)
- Alcohol (sleep-deprived parents don't need hangovers)
- Travel and holidays (for the first year at least)
- Clothing for yourself (yoga pants become acceptable)
Building Financial Security for Your Family
- Life insurance: Essential once you have dependents
- Will: Name guardians for your child
- Emergency fund: More important than ever
- Start a Junior ISA: Long-term savings for child's future
About iBudget
iBudget helps couples and families take control of their finances with simple, collaborative budgeting tools. Track spending, set goals, and build wealth together.
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