Please do not use Cedar or Pine Bedding, they can be harmful to all gerbils, but particularly pups. Clean out the bedding on a regular basis. I like to give my gerbils between two and three inches of bedding. They love to pile it up, and bury their food in it. Then after reading I through it all out.
Pups can occasionally become entangled in it.
Plain white, unscented tissue provide a safe and inexpensive nesting material. I shred it into narrow strips and leave the rest to them. There are a number of styles and most come with a simple wire hanger to use with cages. Be sure that the tip of the water bottle is well above the bedding. If the tip comes in contact with the bedding or other material it will leak.