Life insurance

How Our Budget (and Mindset) Changed After Our First Baby

By Jessica Sillers Oct 17, 2023

In this article

Megan R.: More Expensive the Second Time

Audrey F.: Buying Used to Balance Costs

Hark V.: A Surrogacy Story

Some aspects of parenting are easier the second time around, or at least more familiar. The second kid’s picky-eater phase may spark less anxiety when you’ve already coached one kid to eat more than dino nuggets and blueberries. But other aspects can feel just as big and new, no matter how many kids you have. 

Every new baby changes your whole family, shifting schedules, sibling relationships and expenses. We asked real parents to share how their baby spending and mindset changed as they prepared for baby #2 (or #3!).

Megan R.: More Expensive the Second Time

Sorry to break it to parents hoping the first nursery spending spree is the biggest. Subsequent kids can come with just as many costs—even if you plan to use hand-me-downs. Megan R. and her husband, Greg, have a boy and a girl, ages (almost) 7 and 4. 

“When I think about it, we probably either spent the same or maybe even a little more for our second. But we had a baby shower for our first, so that meant other people were buying a lot of the stuff we needed,” Megan says.

Megan’s family reused baby gear and got used clothes and toys from relatives, but it’s not always possible to avoid duplicate purchases. Both kids may still need car seats, for example. If your toddler was sleeping in a converted crib that you want to reuse for the baby, buying a “big kid” bed might technically be a purchase for your oldest, but it’s still an expense prompted by having another baby on the way. And some of the biggest costs aren’t possible to find as a hand-me-down.

Parental leave

“My husband’s parental leave was basically the same—he was at a large enough company that he could take off a month of paid parental leave with each of our two kids, which was a huge help. My maternity leave, however, was very different because my employment situation was totally different. The first time, I had a full-time job. I covered my 12 weeks of leave with a combination of saved PTO and short-term disability (the PTO gave me my standard salary, but short-term disability was 60 percent). With my second, I was freelancing, so not working means not getting paid,” Megan says.

She took less time off with her second child—two months instead of three—and even then worked an hour a day to keep up with the needs of a new client. 

Childcare expenses

“Daycare for sure was our biggest expense,” Megan says. Enrolling two kids basically doubled the overall costs. “Daycare tends to be most expensive for infants and then goes down slightly as children age up, and our daycare does provide a sibling discount, but they take it off the lower tuition.”

The United States doesn’t offer federally funded childcare. Parents often have to figure out their own balance of staying home, researching daycare or nanny options near them or relying on relatives. Your state may also offer childcare financial assistance in the form of vouchers, certificates or subsidies for eligible families.

Megan’s takeaway

Other new parents can follow Megan’s lead by considering the overall lifestyle changes (and associated costs) that come with adding more children to the family, from college savings to household furnishing.

“We’ve seriously considered a third. Daycare and a college fund—plus how those affect our long-term financial plans like retirement—are probably our biggest financial concerns. We’d also then have to upgrade other household items to fit a family of five instead of four, like a larger kitchen table or car.”

Audrey F.: Buying Used to Balance Costs

Audrey F. and her husband, Brad, have three children—two boys aged 6 and 4, and a 1-year-old daughter. She estimates her new-baby budget has stayed fairly even, thanks in part to relying on secondhand supplies from the start. (Shopping secondhand is one way to free up extra cash for your emergency fund, too.)

“All three kids have used the same crib and mattress, stroller, car seats, carriers, high chair, rocking chair, dressers, diaper change pad and big toys such as activity centers. I also kept a lot of baby toys. I am not sure if I’m sentimental or if I’m cheap, but both younger kids were set up well,” she says.

Shop used to stay on budget

Audrey got most of her first baby’s supplies secondhand or as baby shower gifts. Many families get less baby shower support for subsequent kids, since relatives and friends may assume they have what they need. Of course, you’ll still need to buy certain gear new if it’s hard to find or unsafe to get used (e.g., double stroller, car seats). 

“For our daughter, she got mostly a new wardrobe,” Audrey says, for example. Many outfits were from thrift store or garage sale finds, but there can also be a pull to splurge on the last baby, or the first child of a different gender. “Her being my first (and only) girl, and me being a girly girl myself, I probably spent more on clothes for her than both the boys.”

More work hours, more childcare bills

Like Megan, Audrey found that changes in her and her husband’s work life made a big impact on their decisions and spending around big costs like childcare.

“When we had our second and third children, we were in a much different situation financially and geographically. Brad had much more parental leave with [the younger two kids],” she says. “We pay way more in child care now since I am working more during the day. With [our first], we couldn’t afford child care to justify me working a substitute teaching job during the day, so we didn’t have to pay as much in child care as we are now.”

Audrey’s takeaway

A big money-mindset takeaway for Audrey was stepping away from the idea of brand-new items being a better choice.

“When we were preparing for our first, we hit up garage sales and even pulled some dressers and book shelves from the curb that others had thrown away. We did this because we had to. I suppose that something I did differently with my second and third babies was let go of the notions that new is better and to welcome all of the freebies and cheaper options! It didn’t make sense to spend $20 for one outfit when I could purchase six outfits secondhand for the same price. A Pokemon shirt is a Pokemon shirt, no matter how many people have worn it,” she says.

Preparing a budget for a new baby is always going to have aspects that are personal to your family—your overall finances, goals and what you value spending on. 

As Audrey says, “The other big thing that we learned is not to compare my children to anybody else’s. And this includes my own other kids. Every child grows and develops differently and that is OK and healthy.”

Hark V.: A Surrogacy Story

For many families, a new baby budget starts long before it’s time to prepare a nursery. Fertility treatments, surrogacy and adoption can be costly, but well worth it to welcome new additions to your family. Hark V. and his husband, Colin, have a 3-year-old son and 1-year-old daughter through gestational surrogacy.

Hark says, “While I personally didn’t care if any of my children were biologically my own, this was something that my husband preferred for at least one of his children (which is a perfectly reasonable desire). Adoption was certainly something else to consider, but that came with its own hurdles and challenges, especially considering how more difficult it can be to adopt children as gay parents.” Surrogacy felt right, although that process can also be financially and emotionally overwhelming.

Cost breakdown for surrogacy

It can be difficult to wrap your head around the complexity of the medical, legal, agency and surrogate compensation expenses to make sure everyone involved is healthy, protected, fairly compensated and prepared to act as a team to bring a baby into the world.  

The costs of working with a gestational surrogate vary depending on which agency you work with. This list shows a basic breakdown of Hark and his husband’s expenses:

  • Over $25,000 in surrogate agency fees

  • About $50,000 to the surrogate, including her compensation, medical and health insurance expenses

  • About $50,000 in IVF expenses: Genetic testing and surrogate testing were roughly $4,000 each, a single IVF cycle was $22,000 and a frozen embryo transfer cycle cost $5,000, among other expenses.

  • Over $10,000 in lawyer’s fees to prepare a gestational contract, manage parentage proceedings and cover the surrogate’s legal representation

All told, Hark estimates it cost over $130,000 to have their first child. He says, “Note that a lot of those numbers are based on the first transfer succeeding in a birth. Many of the numbers would increase if multiple transfers were necessary.”

Surrogacy round 2

Completing their family meant working with a surrogate again, although some steps were already done.

“The biggest difference was that we did not have to go through IVF again because we froze our embryos from the first time,” Hark says. “Everything else essentially remained the same. Even then, the second child cost just under $100,000 all inclusive. So while we definitely saved money the second time around, the cost still wasn’t trivial by any stretch of the imagination.”

Hark’s takeaway

Planning your schedule to fit your priorities is just as important as managing your budget. Part of your ability to plan time with your kids depends on external factors like work benefits.

“I am fortunate that my company is very progressive in their parental leave. I am a firm believer that at least one parent should try to stay home with their child for the first three months if at all possible. I was given three months of parental leave, plus an additional month of parental leave if I needed it…I wish more companies across the U.S. adopted these parental leave policies, especially for fathers,” Hark says.

He also recommends that parents make time for themselves, as well as for quality family time, so you can refill your own cup.

“My husband and I did a lot of planning in our schedules to allow time for each of us to continue doing at least one hobby that we enjoy individually, plus time for us to be together as a couple as well. It’s a balance, and I know that some peoples’ situation makes this harder than others (single parents especially). But if there is any way that you are able to continue doing at least one thing that you love and re-energizes you, you should absolutely do it.”

A new baby is always a big change, but your experience means you’re a different parent, too. The lessons you learn in planning for your firstborn come in handy when it’s time to prepare emotionally and financially for a new sibling. Reassessing work and childcare options, embracing hand-me-downs or prioritizing date night, as well as keeping an eye on long-term plans like college, can make you feel more prepared for the next phase of family life.

Fabric exists to help young families master their money. Our articles abide by strict editorial standards.

Fabric by Gerber Life exists to help young families master their money. Our articles abide by strict editorial standards.

Information provided is general and educational in nature and is not intended to be, and should not be construed as, financial, legal, or tax advice. Laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of this information. Federal and state laws and regulations are complex and are subject to change. We make no warranties with regard to the information or results obtained by its use, and disclaim any liability arising out of your use of, or reliance on, the information.

Fabric by Gerber Life offers a mobile experience for people on-the-go who want an easy and fast way to purchase life insurance.

Written by

Jessica Sillers

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