How To Budget For A Baby | Lighthouse Financial

How To Budget For A Baby Episode 109

This week we're joined by Catherine Emerson from Kernel Wealth to talk about how to budget for a baby


Bringing a new life into this world is an exciting experience, but it can also be a financially challenging one. From diapers to daycare, the costs of raising a child can quickly add up. That’s why it’s important to budget for a baby from the very beginning to ensure you’re financially prepared for this new chapter of your life.

At Lighthouse Financial, we understand the importance of financial planning for families, and we offer a range of holistic financial services to help you manage your money effectively. In this blog post, we’ll provide some tips on how to budget for a baby in New Zealand, answer some common questions about the costs of having a baby, and discuss how Lighthouse Financial can help you with your financial planning needs.

How much should you save for a baby in New Zealand?

One of the first questions that many new parents have is how much money they should save for a baby. While the answer to this question can vary depending on individual circumstances, it’s generally recommended that you save at least a few thousand dollars before the baby arrives.

Some of the expenses you’ll need to consider include:

  • Doctor and hospital fees during pregnancy and childbirth
  • Baby equipment, such as a crib, stroller, and car seat
  • Diapers, clothing, and other baby essentials
  • Childcare expenses if both parents will be working

It’s also important to consider unexpected expenses that may arise, such as medical emergencies or unforeseen household repairs. For this reason, it’s a good idea to have an emergency fund set aside for unexpected costs.

At Lighthouse Financial, we can help you determine how much you need to save for a baby and create a personalized budget to help you achieve your savings goals. Our financial planning services can also help you with debt repaymentcashflow management, and goal setting to ensure you’re financially prepared for your growing family.

How much do babies cost in New Zealand?

Whether you use cloth or disposable diapers, breastfeed or use formula, and whether you choose to use childcare services or stay at home with your baby.

The cost of raising a baby in New Zealand can vary depending on a number of factors, such as

According to a 2020 report from the New Zealand Ministry of Business, Innovation and Employment, the estimated weekly cost of a baby in the first year is around $215 for a single-income family and $340 for a dual-income family. This includes expenses such as:

  • Formula and food (around $40 per week)
  • Diapers and other baby supplies (around $20 per week)
  • Clothing and accessories (around $10 per week)
  • Healthcare costs (around $15 per week)
  • Childcare costs (if applicable, around $130 per week)

It’s important to note that these figures are estimates, and your actual costs may vary depending on your specific circumstances and choices.

How much money should you save before your first baby?

Preparing for a new baby can be overwhelming, but having a financial plan in place can help ease some of the stress. Ideally, you should aim to have a comfortable cushion of savings set aside before your first baby arrives.

It’s recommended that you have at least three to six months’ worth of living expenses saved in an emergency fund. This can help cover unexpected expenses that may arise, such as medical bills or car repairs. Additionally, it’s a good idea to have a separate fund specifically for baby-related expenses.

At Lighthouse Financial, we can help you determine how much you should save before your baby arrives and provide guidance on how to build up your savings. We can also assist you with goal setting and debt repayment strategies to help you achieve your financial goals.

How to budget for a baby

Budgeting for a baby is an important part of preparing for parenthood. Here are some tips to help you create a budget that works for your family:

  • Borrow if you can before purchase: Not all babies like all things, so it’s a good idea to borrow items like swings or bouncers from friends or family before buying them.
  • Ensure you have money set aside for your recovery: It’s important to plan for the cost of your own recovery after giving birth, including medical expenses, time off work, and any necessary support services.
  • Spend on important, high use items: Some items, such as car seats, strollers, and cribs, are essential and will get a lot of use. Investing in quality items in these categories is important, but you can save money on other items like baby clothes and toys.
  • Be realistic about how you will spend money during parental leave: It’s important to factor in the cost of things like sanity coffees and activities for your baby during parental leave when creating your budget.
  • Have the important conversation around money with your partner before the baby arrives: Make sure you’re on the same page about your financial goals, priorities, and how you plan to manage expenses.

Buying a home with a baby

Buying a home is a significant financial decision, especially with a new addition to the family. Here are some things to consider when buying a home with a baby:

  • Space: Consider the space you need to accommodate your growing family. Look for homes with enough bedrooms and living space to accommodate your family’s needs.
  • Location: Think about the location of the home and how it will impact your family’s lifestyle. Consider factors like school districts, parks, and proximity to work or family.
  • Affordability: Determine how much home you can afford before beginning your search. Factor in all the costs of homeownership, including mortgage payments, property taxes, and maintenance.
  • Government subsidies: Take advantage of government subsidies like the KiwiSaver HomeStart Grant, which provides first-time homebuyers with up to $5,000 for an existing home and up to $10,000 for a new build.
  • Insurance: Protect your investment with home insurance and consider life insurance, illness insurance, disability insurance, and income protection to ensure your family is taken care of in the event of an unexpected event

At Lighthouse Financial, we can help you navigate the home-buying process and create a plan to ensure your family’s financial security. We can assist with goal setting, cashflow management, and insurance strategies to help you achieve your financial goals and protect your family’s future.

The importance of insurance for a growing family

As your family grows, so do your responsibilities. It’s essential to protect your family’s financial future with the right insurance coverage. Here are some types of insurance to consider:

  • Life insurance: Life insurance can provide financial support to your family in the event of your untimely death. It can cover the cost of funeral expenses, outstanding debts, and provide an ongoing income stream for your family.
  • Illness insurance: Illness insurance can provide financial support if you are diagnosed with a serious illness. It can help cover the cost of medical bills, time off work, and other expenses.
  • Disability insurance: Disability insurance can provide financial support if you become unable to work due to a disability. It can help cover your living expenses and provide a stream of income.
  • Income protection: Income protection can provide financial support if you become unable to work due to illness or injury. It can help cover your living expenses and provide a stream of income.
  • Health insurance: Health insurance can help cover the cost of medical bills and other healthcare expenses. It’s essential to have health insurance for your growing family.

At Lighthouse Financial, we can help you determine the right insurance coverage for your family’s needs. We can assist with cashflow management, goal setting, and budgeting to ensure you have the coverage you need to protect your family’s future.

KiwiSaver for your baby’s future

KiwiSaver is a voluntary savings scheme in New Zealand designed to help you save for retirement. However, it’s also an excellent option for parents who want to start saving for their child’s future.

By setting up a KiwiSaver account for your baby, you’re giving them a head start on their retirement savings. The earlier you start saving, the more time your money has to grow, thanks to the power of compound interest.

Your baby can start receiving contributions to their KiwiSaver account from birth. You can make contributions to the account, and they may also receive contributions from the government and their employer if they have one.


Bringing a new baby into the world is an exciting time, but it can also be overwhelming, especially when it comes to finances. By budgeting and planning ahead, you can ensure you’re financially prepared for the arrival of your little one.

At Lighthouse Financial, we understand the challenges of starting and growing a family, which is why we offer a range of services to help you manage your finances. From budgeting and debt repayment to goal setting and insurance, we can provide expert advice and guidance to help you achieve your financial goals.

Remember to factor in the cost of having a baby in New Zealand when planning your budget, and don’t forget to consider expenses beyond the initial purchase of baby gear. By being realistic about your spending and setting achievable goals, you can ensure you’re well-prepared for the exciting journey of parenthood.

For a no obligation discussion to see how we can help you on the path to wealth, please contact us.

The information in this article is general information only, is provided free of charge and does not constitute professional advice. We try to keep the information up to date. However, to the fullest extent permitted by law, we disclaim all warranties, express or implied, in relation to this article – including (without limitation) warranties as to accuracy, completeness and fitness for any particular purpose. Please seek independent advice before acting on any information in this article.