Babies cost more than new parents might think. In 2005, Redbook Magazine and VISA surveyed 1,000 parents — 500 expecting and 500 new — and found that expectant parents’ financial expectations were different from the realities new parents lived in.

For both groups, family finances were a top concern (if not the top one) — but just how concerning depended on whether their babies had been born yet. A full 76 percent of expecting parents thought they were financially prepared for children, while just 59 percent of new parents felt the same way.

Either way, new and expecting parents reported many of the same money mistakes:

1. No budgeting—Less than half of expecting and new parents set up a family budget. Expecting parents spent more time shopping for baby items (car seats, cribs, toys, etc.), thinking up a name, and divvying up parental duties than making a budget.

2. Underestimating delivery costs—Right from the start of their kids’ lives, new parents pay more than expected. Half of the expected parents surveyed believed hospital delivery of their child would be $300 at most. Half of the new parents surveyed said it was $500 at most.

3. Splurging—New parents spent too much for the things their babies sit or sleep in. Forty-four percent said they spent too much on a car seat, and 36 percent overspent on a stroller. Other splurges include professional baby photos (25 percent of parents reported spent too much), cribs (24 percent), clothes (23 percent), toys (21 percent), and a video camera (17 percent).

4. Sweating the small stuff—Here’s a bright spot: expecting parents tend to overestimate the day-to-day costs of having a baby, with 48 percent saying their were very worried about it. That number dropped to 33 percent for parents of new babies—meaning daily expenses aren’t as bad as most expecting parents think.

5. Underestimating college—New parents tend to be more concerned about school after they have their child. Only 25 percent of expecting parents said they worry about the costs of school and college, compared to 40 percent of new parents. If you are looking for a way to start saving for college when your child is born, one option is a state-run 529 plan, which you can put money into in order to save for tuition, room and board, and other college fees.


  • Less than half of new parents said they made a budget for baby expenses.
  • Parents feel less financially prepared for kids after having one.
  • New parents tend to overspend on car seats, strollers, and a few other items.

Last reviewed by Kristie Rivers, MD, FAAP. Review Date: September 2020


  1. Redbook Magazine/Visa Inc. Baby Budgeting Survey. September 6-16, 2005.
  2. U.S. Securities and Exchange Commission. An introduction to 529 plans.


  1. I also think people get many baby items that they really don’t even need. I registered for many things with my first child that I honestly never even used. The old saying “less is more” really is true when having a baby. Save yourself money and clutter by not getting every little thing. You really don’t need it all. 🙂

  2. I’d have to say that I didn’t really have any surprises when it came to having our first child when it came to expenses. The only thing we really needed to spend money on after she was born were diapers. Breastfeeding for the first year saved a ton of money and so did making my own baby food. Now that we have another girl we were able to hand down most clothes so luckily that saved us a lot but now that they are older, they are eating ALL of the time and that seems to be were the expenses are these days. And of course saving for college. I get anxiety thinking about all of the expenses that college and two weddings will entail. We started saving when our first was born but it will be nice when I am working again so we can really start to put money aside.


Tell us who you are! We use your name to make your comments, emails, and notifications more personal.

Tell us who you are! We use your name to make your comments, emails, and notifications more personal.