My advice, try it all and see what works best for you!
I tried it all. The hospital swaddled Emma right after birth. They gave me a cute pink fleece swaddle that I used for night time sleep. I originally had her on her back for naps, but she startled herself awoke often. She slept on our chest the first month of her life, so we figured we could put her down on her belly too. She always napped close to us and on the couch. We kept the swaddling to strictly only bedtime, so she'd know that that was bedtime. There's a couple reasons why we decided to put her on her stomach for her naps. The main reason was that she napped longer that way. Plus she's on her back at night already. We bought a Summer summer swaddle for the summer.
We chose not to give her a pacifier and just let her naturally suck her fingers. We read it was easier to ween them off their fingers than the pacifier and the number one reason not to use a pacifier; sucking their fingers is in our nature. Sucking a plastic nipple is not! Since we bought the summer swaddle, which was about 3 weeks ago, Emma has gotten a lot stronger and broke out of her swaddle easily. She wanted her fingers to suck on. I read that babies want to suck on their fingers to sooth them back to sleep. We started swaddling under her arms so she has a blanket around her.. and this tells her it's bedtime. She is sleeping longer now, pretty much through the night 8-10 hours each night. This is a great accomplishment for all of us. Prior to this, she was still sleeping in 3-4 hour sessions. Yes, I still get anxiety and check up in her when she is sleeping and or napping... This worried feeling is part of parenthood and will probably never go away.
She's turning 5 months soon and growing so well. Now that I am on summer break, I am literally spending every waking minute with her. I love it! I am cherishing these moments because I know it'll be busy again soon. Everyday I read her books, sing, talk, play and exercise with her. I know all these interactions are going to help her become a very smart active girl!
