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When I was pregnant I had no idea how much raising a baby would cost.
Sure, I had heard my friends who were parents mention the outrageous cost of formula or how quickly you go through diapers, but I hadn’t really sat down to think about every single line item and how that would impact our budget.
Just preparing for baby’s arrival was expensive and I remember thinking how I wish we would have started saving for baby stuff much earlier.
So just how much does a baby cost? The answer might be more than you think.
A baby is expensive, but your precious little bundle shouldn’t break the bank if you plan ahead.
Start planning and saving now to comfortably afford your baby’s first year, stress free!
How much does a baby cost?
I can recall thinking, “How can someone so little cost so much?” on more than one occasion.
Before I start to unpack the costs associated with having and raising a baby, I do want to point out one pearl of wisdom that my husband often reminded me of, which is: If you wait until you’re completely financially ready to have a baby, you’ll never have a baby.
So keep that in mind before you start to think you need to wait until money is flowing out of your ears to have a baby!
A recent study found new parents can expect to spend upwards of $20,000 in baby’s first year alone.
Between health insurance, diapers, baby gear, feeding your baby, childcare, and more, let me tell you– it adds up quickly.
Now that you’ve picked your jaw off the floor, don’t panic– just plan ahead! I’ll break every expense down and give you helpful money saving tips along the way.
Labor and delivery charges
As soon as you become pregnant or even if you’re thinking about becoming pregnant, take a look at your health insurance benefits.
You’ll want to know early on just how much you’re on the hook for.
Just to give you a ballpark, here’s an awesome list of the average cost of having a baby broken down state-by-state. Just glancing at this list, based on what we paid (after insurance paid their part), it’s pretty dead on.
Now’s the time to beef up your HSA contributions. Contribute beyond what your employer is already and chances are, with just a nominal contribution each month on your part, you’ll likely be halfway to your out-of-pocket expenses by the time you receive your hospital bill.
Keep in mind too, once you receive your hospital bill you can be put on a payment plan. Most hospitals offer payment plans with little to no interest to fit virtually any budget.
Bottom line: Call your insurance company the moment you become pregnant to discuss your portion of labor and delivery costs and start saving. Save first to your HSA account and then chuck extra into your savings.
While you can certainly pick and choose which baby products are absolute necessities, healthcare isn’t something you can decide on having.
As soon as you become pregnant, review your health insurance plan with your employer. Compare and contrast benefits and cost with your spouse’s health insurance policy, too.
Bottom line: Factor in the additional cost of adding your baby to your healthcare plan and put a little aside each month towards that added expense.
Nursery and baby gear
Turns out babies don’t actually need that much stuff.
Beyond love, basic clothing, a warm place to sleep and food, babies don’t really require a bunch of fancy equipment.
I continue to be amazed at all the “designer” baby gear out there. And you can very quickly get caught up in letting mom guilt convince you to buy top-of-the-line baby gear.
Save money on baby’s items by getting creative: Facebook marketplace, thrift stores, garage sales or friends who have already had babies are all great resources to find significantly reduced baby items.
Put big ticket items like your crib, stroller, car seat and monitor on your baby registry. Aunts, uncles, grandparents, parents and close friends and family will likely want to help out with the more expensive items, anyway.
Here’s a basic list of items you’ll need for baby:
- Crib mattress
- Infant car seat
- Diaper cream
- Baby bath
- Basic clothing
- Breast pump (check with your insurance, you can most likely get this for free!)
Here’s a list of items you don’t need for baby:
- Baby towels
- Changing table (let a thrift store DIY dresser double as a changing table)
- Diaper pail (these are great, but you certainly don’t need them.
- Jogging stroller (basic stroller will due)
- Glider (any comfortable chair will work)
- Nursing pillow (a basic pillow will work)
After you’ve had your showers tally up the rest of the items you absolutely have to have and start hitting up consignment shops, thrift stores and friends for inexpensive alternatives.
Trust me, you’ll be amazed at the gently used items you can score outside of retail stores.
Bottom line: Don’t get carried away and purchase unnecessary items for baby. Look to second hand shops, thrift stores and Facebook marketplace first for big-ticket baby items.
Feeding your baby
I completely understand that for a lot of different reasons, sometimes breastfeeding isn’t in the cards.
But if you’re contemplating not breastfeeding, it’s important to consider the cost of formula feeding first.
Kelly Mom has a great resource and has actually studied the typical amount parents spend on formula each year.
On average, parents spend anywhere from $816 to $3,163 on formula in their baby’s first year.
Likewise, when baby starts eating solids, you can save a ton of money by making your own baby food.
I used this guide from The Comfort of Cooking to make my own baby food. This saved me hundreds!
Bottom line: Breastfeeding and making your own baby food will save you hundreds of dollars during your baby’s first year.
Would you believe that more than 33% of families spend over 20% or more of their annual household income on childcare?
The extravagant cost of childcare is something that totally caught me off guard. Here’s a few childcare cost saving secrets I’ve picked up:
- I found the more affordable and high-rated the daycare center, the quicker spots filled— so start calling daycares the moment you become pregnant (in some major cities, you might even consider doing this before you become pregnant, as the waitlist is often pretty long).
- If you have an an FSA through work you can contribute pre-tax funds($5000 max per year for married couples) directly from your paycheck.
- Church daycares tend to be much more affordable than other options. YMCA also has pretty cost-effective options, too.
- If you’d prefer to have a nanny, look into options to share a nanny with another family.
- See if you and your spouse can shift work around so that you only have to pay for care a few times a week.
Bottom line: Child care is expensive. If you’re planning to return to work but are having trouble figuring out how you’ll afford childcare, see if you can get creative with your schedule to reduce the amount you’ll spend on child care.
Newborn babies go through an average of 6-8 diapers a day. That’s a lot of diapers.
At about $0.20 per diaper, you can expect to spend quite a bit in diapers and wipes.
I didn’t do cloth diapers, but I’m totally kicking myself in retrospect. I could have saved hundreds.
You can also save a ton of money if you shop smart and prepare a diaper stockpile. Expect to spend significantly less than .20 per diaper if you use coupons and sign up for diaper savings programs.
Bottom line: You’ll save hundreds using cloth diapers or by getting smart with coupons!
No surprise here, toys are expensive. See a trend? Practically everything you need or rather think you need for baby is expensive.
Retailers know parents and soon-to-be parents have a whole lot of guilt wrapped up in thinking they need to provide their baby with nothing but the best.
Don’t give into this guilt brought on by retailers who want your hard-earned money! Your baby does not need a ton of toys.
Before our baby arrived I didn’t buy too many toys at all and I kept fretting about it. I can’t tell you how many times I told my husband, “She just doesn’t have any toys!”
He told me she didn’t need that many toys countless times, and guess what?
He was right.
Bottom line: Toys, just like clothes and gently used baby gear, can be purchased second-hand for a fraction of what you’d pay at retailers. Don’t let mom guilt make you feel like you need to spend a lot on toys. Trust me, in the first 6 months your baby will require very little and delight the most in YOU!
It’s true, babies come with added cost. But they don’t need to break the bank. Start planning and saving as soon as possible to reduce unwanted stress associated with draining your bank account.
Keep reading: How much do diapers cost? Find out how much you’ll spend on diapers per month and learn 10 ways to save hundreds on diapers!