The Best Ways to Cut Costs With a New Baby

Look for Ways to Reduce Child Care Costs

• Child Care Aware of America reports that the average cost of full-time care for an infant is between $4,600 and $15,000 per year, depending upon what state a parent lives in. In 36 states, child care is more expensive than a year's tuition at a public university. In all 50 states, child care is more expensive than the median rent payment. To reduce the cost of child care, it is worth considering options such as staggering work schedules so one parent is always available to watch the baby, or swapping child care services with a friend or family member. You should also keep good records of child care expenses to make sure you're taking the maximum tax credits allowed each year.

Breastfeed

• Not all women are able to breastfeed, but nursing is certainly something to consider if you're worried about the cost of a new baby. It's hard to get accurate cost comparisons since not all women breastfeed exclusively and many do not nurse for a full year. However, U.S. News & World Report estimates that formula can cost more than $1,500 in the first year. Working mothers will likely have to purchase a breast pump and other nursing supplies, but may be able to do so with funds from flexible spending accounts, an employment benefit that lets workers pay for health care costs with pretax dollars.

Make Your Own Baby Food

• Once your baby is eating solid foods, consider making your own baby food instead of purchasing pre-made foods at the grocery store. Baby food simply consists of steamed and pureed fruits and vegetables. No seasonings are added, so it's easy to make your own baby food even if you don't like to cook. If desired, small portions can be frozen in ice cube trays for later use.

Use Cloth Diapers

• In addition to being eco-friendly, cloth diapers can help parents cut costs with a new baby at home. The Real Diaper Association estimates that a typical baby uses 6,000 diapers during the first two years of life at a cost of about $1,600. A simple set of six dozen basic cloth diapers can be purchased for about $300. The diapers should last for two children, which results in an even greater savings for couples who are still planning on adding to their family in the future. If cloth diapers are prescribed by a doctor to treat a baby's skin condition, they are eligible for purchase under employer-provided flexible spending accounts.

Skip the Baby Shoes

• Baby shoes, which Parents magazine estimates cost approximately $30 per pair, are unnecessary until your child is able to walk. Use inexpensive soft booties to keep your baby's feet warm when you're outside.