On January 11, 2011, I found myself jumping around in my bathroom with my mind racing with a piece of plastic gripped in my hand.

I found out I’m pregnant with my first baby.

How I have waited for this day.

Waited for a year and a half.

I had recently made doctor’s appointment with my doctor about my infertility. It took two weeks to get into see her.

The day before my appointment, I met with a friend for coffee.

My friend had a baby. I sat and watched him play on the floor and wondered if I would ever watch my own baby play.

I drove home crying.

Suddenly I realized aunt flow might be a bit late. A day late.

I drove to the nearest drug store and bought a pregnancy test.

I got home, ran to the bathroom, and peed on the stick.



Financial Planning for baby
This is me, 6 month pregnant at the Parthenon.

In the days to come, I worried about all sorts of pregnancy things: miscarrying, complications, being sick, being a bad employee, etc.

There was one thing I was not really worried about though…


Because of our trouble getting pregnant, financial planning didn’t really cross my mind all that much. I was just so happy to be pregnant. And, I was staring down the depths of the toilet!

This is a personal reflection of how we could have done a lot better to prepare financially for both of my maternity leaves. Peace of mind is a lovely thing.

What I want for you is to come out of your maternity in a healthy financial situation. Being off work with your baby is going to be great (well most of the time) but it will be amazing if you don’t have to worry about going into debt while not working.

{This post may contain affiliate links. See my disclosure policy here}

Below you will find my step-by-step action plan and top financial planning tips for baby. 

Take it from someone who has been there.

If you are not pregnant but plan to be soon, start preparing financially for baby now! Don’t wait until you are pregnant.

If you are pregnant and haven’t started, don’t worry you still have some time to get a financial plan of action for maternity leave! Bottom line is to start now! 

How to Prepare Financially for Baby

If you already have some savings stashed, awesome. You are one step ahead.

If you don’t have any or enough savings or you don’t want to dip into that savings, keep reading!

I’m going to be honest with you, we did not plan financially for my maternity leaves. This was incredibly stupid. Don’t be like us.

Financial planning for baby is critical because you are young, maybe in your twenties or early thirties and these years are critical for setting yourself up for a healthy retirement fund.

Don’t allow yourself to get derailed from your larger financial goals.

Below is what I wish we had done.

Here are the steps to financial planning for baby:

1.Know your current financial situation.

Know exactly how much money your family needs to live on each month. To the dollar. Inside and out. Then add in a little more for miscellaneous expenses. Because we all know extra costs pop up.

To do this, track all your expenses and net income. Know what you have coming in and out of your accounts. This is the first step in budgeting for a baby.

Review your bank and credit card statements for the last three months and make a list of all the reoccurring expenses. Also, see how much you are spending on other categories like food and dining out. Add it all up and subtract this from your income.

Basically, create a budget.

Do you have a positive number?

2. Check Insurance Coverage & Hospital Costs.

If you have health insurance, ensure you know exactly what is covered. Particularly in the U.S., you need to ensure your doctor’s fees will be covered. Here is a BBC article that estimates the costs of delivering a baby you should read. According to the BBC, the U.S. is the most expensive country to give birth. Your insurance coverage is going to be key.  

Unfortunately, you might be in a position where you will need to save up tens of thousands of dollars if you don’t have adequate coverage and/or to ensure you are protected from surprise costs.

This can have a huge impact on the rest of the plan below. You might need to adjust your situation significantly.

If you are in Canada, you are very lucky. Your bill should be zero unless you upgrade to a private room provided your insurance doesn’t cover it. 

3. Pay off debt.

If you have consumer debt such as credit card debt, student loans, etc. make every effort to pay as much of this off as you can. Get. It. Done!

If you go into your maternity leave with a lot of consumer debt, it is going to be tough. Take the steps below extra serious and put your all into it.

Make a plan to tackle your debt.

Dave Ramsey’s debt snowball method is so simple and so effective. All you do is list your debts and start to pay down the smallest one first and then go the next smallest, and so on. While you are doing this, pay the minimum on the others. It is so effective because most people get a win fairly quickly and it gives them the motivation to keep going.

Credit Cards

Check to see what other interest rates are out there.

With this information, call your credit card company and negotiate a better rate. Use lower interest rates form other credit card companies to leverage the best rate. If that doesn’t work, switch to a card with a lower interest rate. Chances are you can transfer the balance of your debt to a lower interest rate. However, make sure there isn’t a fee for transferring the balance.

4. Estimate irregular expenses.

This is super important!

These are the expenses that can derail your budget in a big ugly way.

Here is what to do.

Think of as many of your irregular expenses as you can like oil changes, gifts, special occasions, etc. They are expenses that don’t happen every month. Maybe they happen once a year or at some other interval which makes them easy to forget about.

Here is how I account for these irregular expenses. In my excel budget workbok, I have a worksheet for irregular expenses that looks kind of like this:

Budget process for irregular or infrequent monthly expenses
How to budget for irregular expenses each month

Each month I revisit this worksheet and update it. The green means I incurred this expense. You can see we have over $10,000 in irregular expenses! Yikes, it adds up fast. However, our kids are in a lot of activities and this year we had to spend a lot on our vehicles to keep them on the road. Not to mention living in Canada is pretty expensive!

Once you have this created, add each month’s total to your corresponding monthly budget. As you can see, your monthly budget from one month to the next is going to fluctuate.

If you don’t use Excel, no worries. Just use a piece of paper and a calculator.

5. Calculate your family income while on maternity leave.

Will you be bringing in any income while off work? (i.e., insurance benefits, employer top-up, side businesses, etc.)

If yes, take out your regular working income and replace it with this amount. (i.e., if you normally make $5,000/month from your job but will only be bringing in a minimum of $800/month, make sure this is the number you have in your budget in addition to your partner’s income.

How much is left at the end of the day?

6. Calculate the amount of money you will need to save while on maternity leave.

How long will you be off work?

The amount you need to plan and save will depend on how long you will be off work.

Maybe you aren’t planning on going back to work after your maternity leave ends or you plan to take extra time. Either way, the amount of time you plan to be off is a factor to keep in mind. If you plan to become a stay at home Mom, this will teach you to adjust to your upcoming financial situation permanently.

How much to save for baby is pretty straightforward. Take the amount you need to live on each month and subtract your family’s income while you are on maternity leave (i.e., your spouse’s income and any amount of money you are bringing in if any) and multiply by the number of months you will be off work.

• Average amount of money required each month for living expenses: $6000*
• Income while off work: $4000
• Monthly shortfall: –$2000

*Make sure you include the irregular expenses in this number. Take the monthly average of this calculation.

If you are going to be off work for 6 months, you will need to save: $2000 X 6 = $12,000.

If you already have this, sweet. If not, or you want to build in some wiggle room, keep reading…

How are you going to save for this amount?

I am assuming you are still working right now.

How many months do you have until you are on maternity leave?

Figure out what you can reasonably afford to save each month until you start your maternity leave.

If you calculate that you will not be able to save up the entire amount you need based on your current budget, start cutting expenses now.

NOTE: If you have a lot of consumer debt to pay off, you are going to need to pay that off as quickly as possible before saving. However, before you pay your debt, make sure to save up at least a $1000 emergency fund. This will ensure you don’t add to your debt if an unexpected expense comes up.

7. Cut your expenses.

Look at each expense and ask yourself where you can cut back.

Here is a list of 21 tips on how to cut everyday expenses and typical budget line items to analyze and see if you can cut back or eliminate:

1. Home and auto insurance. When was the last time you shopped around? If it hasn’t been in the last year or two, get some quotes. Also, consider raising your deductible to reduce your premiums. By switching to a more competitive insurance company and increasing your deductible, you can save hundreds of dollars a year.

2. Negotiate utility bills. Call all your utility providers and see if there is a better rate. If you are in a deregulated area, check out the competition to see if they have better rates.

3. Buy a programmable thermostat. This way you won’t be wasting energy when you aren’t at home.

4. Maybe cancel your gym membership. I say maybe because if you are an avid gym-goer then this should be one of the last things to be cut from your budget. If going to the gym is one of those things you NEED to keep you physically healthy and sane, then DON’T cut it. If you don’t use it or think you could do without, there are a lot of great inexpensive streaming services (ie, Jillian Michaels or Beach Body) and free Youtube channels (ie, GymRa, Fit Sugar, etc). 

I know for me, going to workout classes like spin, cross fit, and pilates has been amazing for me both physically AND mentally.  

5. Limit dining out. If you like to eat out, consider cutting back to next to almost never! This is a huge expense for most people. I know it is nice to eat out but it is so pricey! Save it for special occasions.

6. Keep a food budget. This one is huge. Preparation is 90% of the battle.
Make a list of the meals you and your family like. Try to list as many as you can. Now look at it again and pick out the simplest, cheapest meals that everyone likes. For these meals, stock up on the dry ingredients to make sure you always have them on hand.

  • Meal plan! Take 15 minutes each Sunday and write out your meals for the week. Go grocery shopping and only buy what you need. Put that bag of chips back on the shelf!
  • Make a double batch of dinner. Freeze it or eat it for lunch.
  • Prepare freezer meals. 
  • Use an electric pressure cooker when you are short on time. I love my Instant Pot. Make your own coffee.

I love my Ninja coffee maker. You can make Lattes with it as well. So if you are a latte lover like me, no need to spend $5 per latte when you can just make your own.

7. Cell phone plan. Call your carrier and see if you can either negotiate a lower rate or move to a cheaper plan that will work for your usage level. There is no purpose to lowering your plan if you can’t stay within it though.

8. Limit buying clothes. Consider not buying any clothes for a while unless absolutely necessary. Check out your local Facebook buy and sells, local second-hand stores, Craigslist, Kijiji, Thred Up, etc for deals on gently used clothes. The town I live in has lots of rich people so the second-hand stores have a lot of brand name clothes that look brand new!

9. Cut cable. Ask yourself if you can get by without and just go with Netflix, Hulu, etc. This will save you hundreds of dollars a year.

10. Cut the landline. If you still have a landline, do you need it? Think about making the switch to just having a cell phone.

11. Pay less for haircuts. If you spend a lot on haircuts, seek out a less expensive stylist. There are lots of people who do hair out of their homes for a fraction of the cost. If you don’t know anyone in your area, post this question on a local Facebook group. Although I love my hair stylist, she is quite expensive. By switching to a lady who cuts hair in her home, I am saving $65 per cut!

12. Pay less for nails. If you like to get your nails done regularly, considering doing them yourself or at least going less frequently. Similar to haircuts, there are lots of lovely estheticians who do nails out of their homes for much cheaper.

13. Vacation for less to stay-cation. If you are like me a love to travel, figure out if this is feasible for a while. If you can suck it up and not go anywhere, stay home and get caught up on some stuff around the house or Netflix binge. If this is a no-go, then visit a friend you can stay with or go somewhere you can easily drive to. Check out Groupon, Airbnb, etc., for some great deals. Or check out Nomador.com! You can housesit for people and pay nothing for your accommodations. However, there are responsibilities in taking care of people’s homes so you have to be up for that.

14. Limit Nights out. Chances are you like to go out once in a while. However, it is very expensive to do this. Look at alternatives such as have friends over instead of going to a restaurant or pub. Ask them to bring a side dish. Take turns hosting.

15. Do a no-spend week or month. This is where you and your spouse challenge each other to spend absolutely nothing that isn’t necessary.

16. Get a free checking account. Stop paying silly bank fees! If you are paying $10/month that’s an extra $120/year. I use Tangerine which I love. In the U.S. Capital One offers a free checking account as well.

17. Price compare everything. Before you purchase anything, go online and compare prices. For instance, I had to buy a booster seat for my son. I price compared on Amazon and the exact same booster seat was $15 cheaper than Walmart. The only difference was the color.

18. Never pay for shipping! I have Amazon Prime which cost about $80/per year. However, I strongly feel that it is totally worth it. I save money on products all the time. For instance, on Amazon Prime day, I saved about $75 on my Instant Pot. Also, I am not going to stores as much; therefore, I am not tempted to impulse buy or waste gas.

19. Rent or Mortgage. If you are a renter and you still need to free up cash, look into moving to a cheaper place. If you have a mortgage, call your mortgage lender and see if you can reduce your payment while you are not working. Don’t forget to change your payment back when you go back to work.

20. Investments. This is a tough one because it is hard to stop investing. It might feel like you are making the wrong decision. However, if you have gone through every item on your budget and cut everything possible and you are still short, you should consider temporarily suspending or reducing your investment contributions.

21. Get organized. Know exactly what you have and where it is. This way, you won’t be tempted to buy things because you don’t know where it is or you aren’t sure if you have any on hand.

8. Re-evaluate your situation.

Now that you have slashed your budget, where are you at?

Are you able to save a little more before you start your maternity leave?

If you still have a shortfall, it is time to consider trying to bring in extra income.

9. Make extra money.

Check out my post on super simple ways to make extra money. For this post, I focused on compiling a list of ways to make extra money that doesn’t require three degrees, 45 years of experience, and some super skill that no one else has. This list of ideas if the everyday person!

10. Be careful when buying baby stuff.

You do not need that top of the line crib and matching dresser, the baby swing, two different play yards, bouncy chair, jumperoo, jolly jumper, a million toys, a ton of clothes, etc.

Trust me on this one!SaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSaveSave

Check out my Budget Friendly Baby Stuff Buying Guide to help you figure out what you need, don’t need, and tips for staying in budget. 

Parenting expenses

The bottom line is to start financial planning for maternity leave today! Do not delay.

Make a plan and stick with it.

Who knows! You might find you like your new frugal lifestyle. I think you will be surprised by how much better your bank account will look and how awesome that will feel.

Let me know what you think of this post by making a comment below.

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