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How much to save for a baby

Learn to prepare for unexpected expenses when you’re expecting.

Updated

Fact checked

A high-yield savings account to save for a baby: American Express® High Yield Savings

American Express® High Yield Savings logo

0.6%

APY

  • Monthly fees: $0
  • Interest compounded daily
  • Minimum deposit to open: $0
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Having a baby is an exciting and fulfilling time in your life. But it can also be expensive. From diapers and formula to cribs and strollers, the average American is projected to spend more than $10,000 in the first year of raising a child. But with a little planning, your little one can make a more gentle dent in your budget.

How much should I save for a baby?

The costs you can expect when introducing a new baby into your life depend on your parenting style, your lifestyle and safety nets like family and insurance.

Birth and health

Without insurance, you can expect to pay up to $7,000 in costs related to the birth alone, according to 2014 stats from the government’s Healthcare Cost and Utilization Project.

  • Uncomplicated birth: $2,900 to $4,700
  • Birth with complications: $3,800 to $6,500

If your child comes to you through adoption, Adoption.org suggests budgeting for higher costs.

  • Private agency: $30,500 to $48,500
  • Intercountry adoption: $20,000 to $50,000
  • Home study fee: $2,000 to $4,000

If you plan to return to work, you’ll need to factor in the costs of child care projected from $3,500 to $18,000 a year, according to a 2015 report from ChildCare Aware of America.

Everyday baby items and care

Beyond medical bills and care, other baby-related expenses you’ll want to budget for include items for safe travel and sleep, food, diapers and clothes.

Baby and safety gear

  • Car seat: $50–$250
  • Stroller: $100–$500
  • Crib and mattress: $200–$500
  • Baby carrier: $50–$150
  • Rocker: $200–$600
  • Swing: $75–$125
  • Baby gates: $50–$150

Food

  • Nursing: $50–$350
  • Formula: $1,750
  • High chair: $50–$250
  • Bottles, pacifiers, etc.: $50–$250

Diapers

  • Cloth: $250
  • Disposable $850

Clothes

  • New: $700
  • Used: $350

How to save for a baby

Financially prepare for your newborn and beyond by leveraging your savings early.

1. Estimate your first-year expenses.

When you budget for your baby, you may want to set aside up to $12,680 for the first year, according to USDA data reported in 2017.

There’s a good chance you’ve already registered for a car seat, stroller and other must-haves. But be sure to speak with your insurance company about how much you can expect to pay out of pocket for delivery and well visits. Then factor in the everyday items you’ll need to budget for, like diapers and formula, as well as expenses like child care. Your loved ones may be planning to contribute gifts or cash, which will help with your expenses.

2. Pick an account and start saving early.
High-yield savings accounts can help you earn interest on your baby fund before your baby even arrives. If you’ve already built up a nest egg, consider investing it in a money market account. They may require higher minimum deposits, but you can find one that comes with a debit card to help cover expenses as your due date approaches.

3. Schedule regular contributions.
Stashing away money before baby arrives positions you to pay for immediate expenses as you navigate parenthood. But you’ll want to keep up your nest egg to ensure savings to fall back on as your little one grows into toddlerhood.

Consider autopay to meet your monthly deposit goals. For additional help, look into apps that round up your purchases and automatically deposit the difference into your savings.

4. Open an FSA.

A flexible spending account (FSA) allows you to set aside pretax income to pay for eligible health expenses. Contact your employer to see if you can open up this account, so you can start taking advantage of the tax benefits that come with it.

5. Clear the clutter.

Sell any items that you won’t need once baby arrives. Your city or neighborhood may even support a list-serv to help you put up baby’s outgrown or old gear and clothing for extra cash.

How to compare accounts for a baby

When comparing accounts, don’t focus only on the interest rate. Other factors can make saving easy and motivate you to keep going, including:

  • Fees. Monthly and administrative fees can eat into your savings. Look for an account with low fees or a way to waive them.
  • Access. If you find saving difficult, weigh accounts that limit your access or lock away a portion of your balance. For more convenient access, narrow down accounts with debit cards and wide ATM networks.
  • Account features. Autosave, roundup, bill pay and other features can help you make a habit of socking away money.
  • Deposit and balance minimums. Read the fine print to be sure you can meet opening requirements and any other minimums that can help you skirt regular fees.
  • Rewards and bonuses. Get a head start with accounts that offer rewards or bonuses for merely opening an account.

Compare accounts to help you save for a baby

High-yield savings accounts are probably your best bet to save the most before baby arrives, but a money market account could be handy if it comes with a debit card you could use to start spending that money as your due date nears.

$
$
months
Name Product Interest rates (APY) Fee Minimum deposit to open Interest earned
American Express® High Yield Savings
0.60%
$0
$0
Enjoy no monthly fees and a competitive APY with this online-only savings account. Accounts offered by American Express National Bank, Member FDIC.
Axos Bank High Yield Savings
0.61%
$0
$250
No monthly maintenance fees. No minimum balance requirements. Interest compounded daily.
Aspiration Spend & Save Account

1.00% on $0 to $10,000 but you’ll need to be enrolled in Aspiration Plus and make at least $1,000 in debit card purchases a month
$0 per month or $7 per month for Aspiration Plus ($5.75 per month if you pay annually)
$10
Deposits are fossil fuel-free and insured by the FDIC. Enjoy a spend and save combo account with unlimited cash back rewards and a $100 bonus when you spend $1,000 in your first 60 days.
CIT Bank Money Market
0.55%
$0
$100
A savings account with a higher-than-average rate and minimal fees.
SoFi Money
0.25%
$0
$0
SoFi Money® is a cash management account that charges no account fees to save, spend, and earn cash back rewards when you spend on brands you love.
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Compare up to 4 providers

$
$
months
Name Product Interest rates (APY) Fee Minimum deposit to open Interest earned
CIT Bank Savings Builder High Yield Savings Account

0.50% on $25,000+ or set up a direct deposit of $100+ each month
0.30% on $0 to $24,999
$0
$100
No account opening or maintenance fees. Daily compounding interest. Earn one of the nation's top rates
CIT Bank Money Market
0.55%
$0
$100
A savings account with a higher-than-average rate and minimal fees.
Discover Money Market

0.50% on $100,000+
0.45% on $1 to $99,999
$0
$2,500
This money market account offers a competitive APY.
UFB Direct Premium Money Market Account

0.40% on $25,000+
0.10% on $0 to $24,999.99
$10 per month
(can be waived)
$5,000
Enjoy the security and earning potential of a savings account while maintaining the flexibility to write checks.
BBVA Money Market

0.21% on $1,000,000+ for 3 months (0.20% after)
0.13% on $10,000 to $999,999.99 for 3 months (0.10% after)
0.05% on $0 to $10,000
$15 per month
(can be waived)
$25
Earn a promotional APY for your first 3 months and access your money by ATM, check or bill pay.
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Compare up to 4 providers

Bottom line

With parenthood on the horizon, you’re in for one fun and wild ride. Keep your eye on the adventure by setting up a firm savings plan and budget as early as you can.

Find the lowest rates and strongest terms you’re eligible for by comparing a range of savings accounts.

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