Most expectant parents realize that babies add expenses to the family's budget, but many don't realize just how quickly the costs add up—from furnishing the nursery to a constant supply of diapers and baby clothes. Plus, there's the need for maternity clothes and hospital and doctor bills. The family may even experience a reduced income if the mother takes unpaid leave from work. Establishing a savings account to fund the new arrival can help you get ready to enjoy this special time.

The first step in learning how to save for a baby is to determine what you’ll need before the baby is born. There are certain big-ticket items, such as a car seat and crib, that need to be purchased, and others that are optional, such as special decor and toys the child won't be able to play with right away. You might want to browse a few online sites to get estimates for the purchases you’ll need to make before you head out shopping.

Shopping at discount stores or even second-hand shops for clothes is a sensible step to take as well. Remember that marketers work hard to convince you of the need for their products, so bear in mind your own definition of "need" vs. "want" in order to keep spending under control.

After a total budget is established, divide that amount into smaller "piles" by the amount of time you have until you need to make the purchase. For example, you might have three groups:

  • Need now or within 3 months
  • Need in 6 to 9 months
  • Need after baby arrives

Your total budget amount divided by the number of months remaining until the final purchases are needed will tell you how much to save each month, but having the three categories helps you decide how much of your budget is taken up now and later. You'll likely find that a great deal of the budget is spent in those first few months.

One way to make the process easier is to open a separate savings account specifically designated to help you save for the baby. Several online banks offer excellent interest rates and don't charge monthly maintenance fees. At Ally Bank, for example, our Online Savings Account pays one of the most competitive interest rates available based on rates published by We don’t charge monthly maintenance fees, and you can open and fund the account with any amount plus earn daily compounded interest.

You may find that it's easier to save money when the savings account is separate from everyday funds. Most employers today offer direct deposit to multiple bank accounts. Having a flat dollar amount or percentage sent directly to the savings account eliminates the extra step of transferring funds, a step that can be forgotten or postponed when you're too busy planning for all the rest of the changes that come with welcoming a baby.

Depending on your specific needs, you may be able to deposit more in the baby fund in the early months, and then taper off to pick up the last few items in the list. Plus, gifts from family members and friends may allow you to adjust the budget and shift funds further into the future. Don’t forget about everyday budgeting tactics like using coupons, looking for rebates and shopping sales to get the best prices on needed items, too.

Prior planning and saving can make quite a difference when it is time to celebrate baby's arrival. The less worried you are about money, the more you can enjoy the once-in-a-lifetime moments with your new son or daughter.

Regardless of when you're expecting your bundle of joy, Ally Bank is here to help you save. Explore our savings products and more at or call live, 24/7 customer care at 877-247-ALLY (2559) today.

View CD Rates