How to save and budget for a baby

The cost of having a baby

The cost of actually having a baby will depend on if you choose to go through the public hospital system or private.

According to Finder's 2023 Parenting Report, the public health system is significantly cheaper, costing $726 on average for all pregnancy and birth-related medical costs. In comparison, the private system costs an average of almost $2,400 (and this isn't including the higher health insurance premiums, it's the medical expenses only).

The report found that two thirds of Australians opted for a public hospital for birth, with reduced costs was named as the main reason.

How to budget for a baby (before they arrive)

Understand your starting point

You need to have a clear idea of where you stand right now financially. Make time to closely look at your current income and expenses, to see how much money you're bringing in and how much is going out. And, most importantly, where it's going.

Think about what you plan to do once the baby is born. Do you plan to stop working for a time, or cut back to just part-time hours? Either of these options is going to affect your income, so you need to consider what your household income will look like.

If your expenses are really eating into your income so that things get a little tight each month, it's time to look at some areas within your expenses list where you might be able to cut back a little.

Trimming the budget

Look for areas where you can save money with your current spending. Remember, the point of cutting back on your spending now is to make room for the additional costs you'll incur once the baby arrives. Work on things you can reduce right now.

Looking at your current spending, what can you remove? Are you spending a lot on takeaway meals or eating out? Perhaps you've got multiple subscription services you don't use any more, or you're paying for multiple streaming services.

Also look at your regular direct debits for things like phone plans, rent or mortgage or insurance premiums. Could you save money on these by comparing and switching to a better deal?

Savings plan

No matter when your baby is due, it's never too early to start a savings plan. Even cutting a few dollars out of your expenses each week can be a great way to get started.

Set yourself a goal of how much you want to save each week or month, and consider opening a high interest savings account to earn interest on the money.

"I found that planning ahead made budgeting for our baby much easier. My husband and I knew we wanted kids at some point in the future, so we figured out how much we'd need in savings for me to comfortably have time off, factoring in maternity leave and government payments.

The goal was really to pay ourselves from savings so it would never feel like we were on one income, therefore limiting financial stressors at an already vulnerable time, particularly during a cost of living crisis. "

Peta Taylor

Associate publisher

What are your baby's needs?

Be realistic about what you'll use regularly, what's essential right away and what you could potentially do without until later.

Items you will likely need right away

• Infant car seat: From the moment you leave the hospital, you need a way to get baby home safely. This means fitting a car seat into the car. You'll need to buy a good quality rear-facing infant car seat that is likely to see you through for at least the first couple of years. It's best to buy these brand new to ensure their safety.
• Bassinet or co-sleeper. This goes next to your bed or in your room and is where the baby will sleep right away.
• Pram or stroller. These can vary in price significantly, and you might decide to buy one second hand.
• Changing table or mat. You'll need somewhere to change your baby right away. however - you might find you don't actually need a full changing table. A small, portable and cheap changing mat or pad will work just as well.
• Baby bath. Until your baby is big enough to sit up unassisted you'll need a small baby bath (although many parents find the kitchen sink works just as well, and is free!).
• Clothing. You'll need a bunch of onesies, singlets, jumpers and blankets right away - although these can all be bought second hand for very low cost.

Items you could wait and buy later

• Cot or toddler bed: Babies will often sleep in a bed-side bassinet in your room for the first 6-12 months, so you can probably wait to buy a cot.
• High chair. Babies won't use a high chair for at least the first 6 months until they begin eating solid food.
• Baby food and utensils. Babies don't start eating solid food for at least 5-6 months, so you won't need to buy bowls, water bottles or cutlery right away.
• Some clothing items. Things like baby shoes, while cute, probably won't get much use until they're starting to walk at around 12 months.

Baby supplies

Here are the main items you'll need every day as soon as the baby is here, which you can start to stock up on now:

• Nappies: Either cloth or disposable, you'll need plenty of these right away.
• Change table supplies: You're going to need a handy supply of baby wipes and nappy rash cream.
• Bottles and formula: Even if you're breastfeeding, you might need to buy some bottles to use for any expressed breastmilk.
• Dummies: It's a good idea to have some handy in different sizes and types, just in case.
• Bath supplies: Stock up on supplies like baby shampoo, baby soap, baby oil, Vaseline and moisturising cream.

"When I was preparing for my first baby, I thought I had to buy everything myself. But I quickly realised that friends and family genuinely want to help, and many were happy to contribute to bigger items like a cot or a rocking chair. I gratefully accepted the support, but I also made sure to do my own research and work out what was truly essential versus just nice to have. That helped keep the costs down.

I also chose to only buy the absolute essentials upfront, then picked up other items as I actually needed them after the baby arrived which made the financial load much more manageable. "

Clare Lee

Publisher

What other expenses do you need to prepare for?

Some of the biggest expenses you might face in the first year or two of your baby's life aren't the obvious things like prams and car seats.

Medical bills: Medicare only covers you for costs you incur while you're in hospital. During your pregnancy and in the year following the birth you'll likely have many GP visits for yourself and your child. If you need additional scans, these may not be covered.

Childcare costs: Depending on when or if you plan to return to work, you may need to arrange paid childcare for your baby. Childcare fees can be very costly, especially if you haven't planned ahead and made room in your budget.

Extra super contributions: If you're not earning super contributions from your employer while you're on parental leave, you might want to plan to make some extra contributions yourself to ensure your super balance continues to grow while you're not in paid work. This is voluntary, but is a great idea (especially because there's already a large super gap between men and women). If you get the government's Parental Leave Pay for a child born or adopted from 1 July 2025, the ATO will also pay a super contribution into your fund after the end of the financial year, according to Services Australia.

"Having a baby initially wasn't as expensive as I thought it would be. We bought almost everything except the car seat secondhand. And we re-sold all of it as soon as my son outgrew it. But when he got older we sent him to daycare. It's now our biggest expense after the mortgage. It's still worth it financially, but it was a shock to the system. "

Richard Whitten

Senior Money Editor

Frequently asked questions

• How do I start budgeting for a baby?

  To budget for a baby you need to start by looking at your current spending, and cutting back where you can to save more money each month. The sooner you do this the better.

• Do I get paid while on maternity leave?

  Some employers will offer paid maternity leave, while others won't. The government's Parental Leave Pay is paid at the national minimum wage for up to 26 weeks (130 days) for children born or adopted from 1 July 2026, according to Services Australia.

• How much do babies cost?

  The cost of a baby can vary greatly between families, from just a few hundred dollars to several thousand in the first year.

• How to save money when having a baby?

  Save money by buying most items second hand, and only buying items you need. Consider borrowing items from friends and family, and lending your own baby items to others when you're done using them.

Written by

Shirley Liu

Publisher

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Shirley Liu is Finder's global program manager. She was previously the publisher for banking and investments and has also written comparisons for energy, money transfers, Uber Eats and many other topics. Shirley has a Master of Commerce and a Bachelor of Media, Journalism and Communications from the University of New South Wales. She is passionate about helping people find the best deal for their needs. See full bio