Okay, heres how it works in my house (and how the money has always worked).
DH & I are paid monthly into our own bank account. Money is taken automatically to our joint account which covers all bills, and now includes our Childminder fees of £90 per week. The money left in our own accounts is our own money.
We currently get £19 p/week which we put into a bank account for our DD. We're still having our child tax and working tax credits processed, which will also go into DD's account. When we need to buy large things, it comes out this money, though DD is nearly 10 months old and we have only had to buy a new car seat at £90 so still a fair amount in there.
I took six months off work. I went back to work as would not have been awarded enough to cover the bills from the government.
For our DD we were brought nearly all the nursery furniutre, a tonne of clothes, pram & first car seat etc. We have had a lot of clothes through Ebay, toys from the car boot (they grow out of them so quickly, and they can be hit and miss, would rather spend 50p on a toy that she wont be interested in than £20).
Foodwise, I breastfed so the only expense I had was an expresser and a few bottles when I went back to work. Hardly notice the cost of nappies either. Food wise, once weaned, she eats almost the same as us so I just blitz up what we're having, bar two days - stir fry night and chip shop night, in which case I make her some pasta with meat and veggies. Cheap as chips really!
As said before - the cost pales into insignificiance. Yes, if you insist on Bugaboo prams and silver booties, babies will be expensive, but I can honestly say that she's worth every penny. And as for a reduced social life, I'd much rather be sat on my bed with DH while DD is asleep between us, marvelling over how perfect she is than living it up in a pub.