How Much Does It Cost to Have a Baby?

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Let’s face it: kids ain’t cheap.

One of the hardest things that new parents have to face is planning for the financial responsibility of having and raising a child. 

This post explores how much money you can expect to fork over by bringing a bundle of joy into the world. 

Top costs when planning for children 

  1. Childbirth and prenatal care
  2. Baby gear
  3. Car seat
  4. Clothes
  5. Baby food
  6. Child care

Childbirth and prenatal care 

The type of birth you have will vary depending on whether you have a vaginal birth, a cesarean section (c-section), a natural birth, or a scheduled induction. 

According to one study, the average cost of birth with insurance is more than $4,500—including labor and delivery. That number jumps up exponentially if you don’t have insurance

Costs can increase with maternity care, medical complications, or extended hospital stays and check-ups. As anyone who’s had kids would tell you firsthand, hospital bills can add up quickly.

Baby gear

Once the birthing parent and child leave the hospital, the costs can really pile up. Here are some of the top baby costs to expect.

Car seat ($50 – $250 or more) 

A car seat can range from economy models to high-end luxury units. Most car seat models tend to run in the $50 to $250 range. 

Clothes ($50 per month) 

Buying clothes can be difficult due to how fast kids grow. It’s common to buy a new set of clothes only for them to last a few weeks. That being the case, it doesn’t make sense to go overboard buying fancy items at first. 

One strategy is to buy clothes a size or two larger than your child so there are always items on hand if they have a sudden growth spurt.

Baby food ($150 to $1,500 or more)

Food costs are going to vary depending on whether you breastfeed, chestfeed, or give the child formula for the first year. 

Breast or chestfeeding costs can include in-home consultation visits and supplies. Parents who require these services are often surprised to learn how much breast or chestfeeding can cost due to the fact that it appears to be the cheaper route.

During the first year, children typically stop nursing and start eating regular food, causing food prices to jump even further. Growing children can devour food, and parents need to plan ahead so there’s always enough on hand. 

Of course, these costs—like all other child care costs—tend to compound when you have multiple children.

Child care ($7,000 to $10,000 annually) 

Oftentimes, parents choose to stay at home with children during their formative months to provide care. However, not everyone has the desire or ability to do this. And even if they do to start, at a certain point, this may become difficult or even impossible.

The amount that you spend on childcare will depend on whether the child goes to a dedicated facility for daycare or if other people come to the home to provide care. 

So how much does it cost to have a baby?

Altogether, having a child can run anywhere from $10,000 to $30,000 or more—and that’s just for the first year. Of course, the above list isn’t exhaustive; you’ll also have to spend money on things like toys, baby gear, and changing tables.

A few years ago, the U.S. Department of Agriculture (USDA) ran a study estimating that the average cost of raising a single child from birth through age 17 is roughly $233,610. 

When factoring in figures like inflation and the price of schooling and health care, the cost of raising that child jumps to around $284,570.

That’s a lot of money any way you slice it.

How to finance childcare 

If you’re a bit shocked at the total cost of raising a child, then it’s time for a reality check. If you’re going to be a parent, you’d better get used to writing checks. For years.

Here’s how to plan for this expensive undertaking.

1. Figure out a budget 

If you’re not already budgeting, it’s time to learn this critical financial strategy. Your ability to manage money is going to be put to the test when you bring little humans into the world. 

It’s a good idea to put together a pre-baby and post-delivery budget so you don’t get stuck trying to balance living and baby expenses.

Look for areas to cut down on waste during the pregnancy to save money. For help, try a service like You Need a Budget. 

2. Reassess your career 

If possible, think carefully about your career well before having a child.

Now is a good time to reassess your priorities in life. Decide if you want to be a full-time parent who takes a step back from work to spend more time at home or if you want to become extra active and driven. Only you and your family can make these decisions. 

Whatever you choose, make sure to think about the monetary implications of your decision. If you take a step back to stay home with your kids, you may need to find other ways of bringing in income.

Side hustle ideas for new parents 

Here are some quick ways to earn extra bucks from home:

  • Take online surveys with Swagbucks 
  • Take an at-home customer service job
  • Become a virtual assistant 
  • Help businesses with social media 
  • Babysit or pet sit
  • Make items and sell them on Etsy or eBay

Learn more:

3. Grow your emergency fund 

Once your cash flow is in order, it’s time to start growing your emergency fund. It’s best to start as early as possible so there’s no shortage of cash when the baby arrives and you can easily absorb delivery costs. 

Under regular circumstances, it’s best to have at least six months of expenses covered in an emergency fund. However, having a baby changes things a bit. 

In that case, plan ahead even further in case you have to take extended time off work. The more you put aside before the baby comes, the easier it will be later to make ends meet. 

If you’re ready to start stockpiling cash, you may want to look into opening a high-yield savings account (HYSA) with an online bank. This will offer a higher interest rate than you’ll find with a traditional account.

4. Increase your investing 

It’s also a good idea to double down on investing if you’re in a position to do so. 

Oftentimes, parents can get so caught up planning for their new children that they neglect their own financial needs. This is a mistake.

Avoiding investing when having a child can delay retirement and lead to other financial complications down the line. 

If you need to, speak with a financial advisor and ask where you should be putting your money for maximum growth and long-term stability. 

Learn more:

5. Start looking into college savings 

Talk to a tax advisor about setting up a 529 plan—a tax-advantaged account for qualified education costs. 

It may seem eons away, but time flies and your child’s college years will be here before you know it. The best time to start putting money aside for school is before your child’s birth. 

Don’t bank on scholarships or sending your child to a cheap state school. It’s impossible to predict the future, and you want to be in a position to provide as much care as possible for their education. 

6. Think about your living space

It’s also important to consider your living space. If you’re renting a small apartment, chances are you and your family will need more space soon. And shopping for a home while pregnant or carrying a child around is not fun.

Consider breaking the renting cycle and buying a home for long-term financial stability and better living conditions.

Again, this is where it pays to work ahead. Buying a home and having a child can be very expensive. That being the case, it’s a good idea to do some advanced financial planning. 

7. Review your health insurance coverage

Talk to your insurance company about adding a child to your healthcare plan. Children can be added to a health plan through age 26. 

If for whatever reason you can’t add your child to your healthcare plan, you’ll have to find third-party insurance through an exchange. 

It’s also a good idea to look into life insurance. That way, you can provide for your family in the event of your untimely demise. 

It should be noted that some insurance plans come with tax-friendly retirement options. Do your due diligence and research your options before signing the dotted line.

Tips for managing baby expenses 

Here are some tips for keeping baby expenses under control.

Wait until after the baby shower to shop

Chances are your friends, family members, and coworkers are going to shower you with gifts. You may get everything from a crib and stroller to clothes and toys. 

Take inventory during pregnancy and wait until the very end to start buying items you’re short on. Otherwise, you could wind up with duplicates that you have no use for.

Sell used items 

There’s nothing more wasteful than buying expensive baby gear and having the child outgrow it in a matter of days or weeks. 

Like-new items can be easily sold on sites like Amazon, eBay, or Facebook Marketplace. Or, you can keep them around and save them for the next baby in your family or friend group to help others save money. 

Embrace hand-me-downs

Kids grow quickly and are experts at destroying clothes, toys, and even furniture. If you buy things for top dollar, there’s a good chance you’ll regret that purchase in a few months.

So keep in mind that trading used baby gear goes both ways! If a friend or family member offers you a secondhand crib that you need… go for it. You’ll save both time and money, and you’ll help the environment as well.

Frequently Asked Questions

Are new baby costs tax-deductible?

Tax credits are available for taxpayers with new babies. It’s possible to lower your tax bill by up to $2,000 per child up to the age of 17. Talk to a financial advisor to navigate this process. 

Is child rearing expensive?

Raising a child can be exorbitantly expensive. It can also be affordable. It all depends on your preferences, your financial situation, and how you choose to parent. 

Some families spend money left and right, taking expensive vacations and sparing no expense. Others choose to live more frugally to save money and protect themselves from unplanned economic downturns. 

Only you can determine how much money you spend on child care. 

What is an obstetrician?

An obstetrician is a doctor qualified in obstetrics, or pregnancy, childbirth, and postpartum care.

Obstetrician costs can range anywhere from $100 to $500 per visit. As such, it’s important to understand the nuances of your health insurance plan and maternity coverage ahead of time.

The Bottom Line 

Kids can cost a lot of money. But there are plenty of strategies to reduce the cost of birth and child care. 

Be smart about finances and start planning as far in advance as possible. Of course, this is not always possible since life can come at you very quickly. 

If you’re in a position where your child is coming and you’re financially unprepared, there are small things you can do to improve your situation. For example, you can budget, take on side work, and start saving as much as possible to cover healthcare costs, food, and supplies. 

Having a baby is one of the best experiences you can have in life. And with a little bit of financial planning, you can have a much easier time bringing a new child into the world.