Have you been wondering if you can afford to have a kid? Raising children can be a priceless experience, but it does come with significant costs. As a new parent, you’ll face many expenses, from supplies such as bottles and diapers to equipment like a stroller and car seat.
Learn what you can expect for costs in the baby’s first year, along with the average costs of raising a child.
- Major costs in a baby’s first year include hospital bills for child delivery or adoption fees, and equipment for a nursery.
- Ongoing costs include food, diapers, child care, and perhaps savings contributions for a college plan.
- It costs an average of more than $16,000 per year to raise a child in 2021, according to U.S. Bureau of Labor statistics (adjusted for inflation).
One-Time Expenses in the Baby’s First Year
When you are welcoming your first baby, there are many unknowns. Among other concerns, you may be wondering what you need to buy and ultimately what it will cost to become a parent.
The average annual costs for raising a child vary considerably depending on the child’s age as well as your household income. Households with higher incomes tend to spend much more.
Here are the main costs you should be aware of as potential additional expenses for the first year.
Nursery and Home Setup
Preparing for a baby involves setting up a space and getting all the things you’ll need. Here’s a checklist of some items babies may need, with their price estimates:
|Crib||$120 to $1,000|
|Crib mattress||$40 to $400|
|Dresser||$80 to $500|
|Electric breast pump||$100 to $500|
|Nursery rocking chair||$100 to $800|
|Stroller||$45 to $1,300|
|Bassinet/cradle||$70 to $260|
|Infant car seat||$50 to $500|
|Changing table and pad||$60 to $500|
|Baby gates||$15 to $200|
|Play yard||$50 to $300|
|High chair||$40 to $400|
|Baby swing||$55 to $270|
|Front carrier||$30 to $180|
|Nursing bras (3)||About $75|
|Crib bedding||$40 to $600|
|Bottles||$10 to $90|
|Activity center||$40 to $130|
|Bouncer seat||$30 to $350|
|Baby monitor||$20 to $400|
|Diaper bag||$25 to $200|
|Mobile||$20 to $60|
|Humidifier||$15 to $250|
|Nursing pillow||$35 to $50|
|Hamper||$20 to $60|
|Lamp for nursery||$10 to $70|
|Diaper pail||$20 to $80|
|Baby bath||$20 to $40|
|Pacifier||$3 to $15|
Getting everything set up can easily cost a couple thousand dollars, depending on how you shop. Keep in mind that not all of these items are necessary. For example, an electric breast pump can be substituted for a much more affordable manual one. You may not even need a breast pump if you are using formula.
You might find secondhand items at lower prices. You may also get many of these items for free from friends or family who no longer need them, or you could receive them as gifts.
If you have a larger budget, you can find higher-end, designer items at higher prices. Many luxury baby items are well out of the average ranges stated above.
Baby Arrival Costs
If you are biological parents facing childbirth, the actual childbirth can carry significant costs in terms of hospital bills. According to 2016-2017 data collected by Fair Health Consumer, the national average cost for a vaginal child delivery was $12,290, while a C-section was $16,907.
Prices you will pay vary widely depending on where you deliver the baby, your insurance coverage, and the specific services you receive.
To get the most accurate estimate for your specific situation, consult with your doctor, the hospital where you will deliver, and your health insurance provider. You can also estimate the cost of a childbirth procedure by using reputable online tools, like the one from Fair Health. For example, a natural birth in Boise, Idaho, is estimated to cost $7,149, and insurance will pay an estimated $3,684 when your doctor is in-network.
Adoptive parents will usually face significant costs for the adoption process. These costs vary widely, depending on whether the process is for an independent adoption or through an agency, for example. Adoption costs for international children can range from $5,000 to $40,000, while the cost of adopting a child in foster care is usually little to nothing.
The Family and Medical Leave Act (FMLA) enables qualifying employees to take up to 12 weeks off from work for the birth and care of a newborn child. Under this law, you are guaranteed your job and group health benefits when you return after the 12-week period.
However, if your company doesn’t provide paid leave or if you don’t have paid time off (PTO), you could suffer a loss of income. The exact loss of income depends on your earnings.
Supplemental insurance plans can cover your pay during family leave as well as helping with hospital costs.
Once your baby is home with you, it will be a whirlwind of learning, excitement, and probably a bit of exhaustion—as well as more costs. Other ongoing costs you can expect include:
- Food: The USDA estimates that the cost to feed a child in the first year, using a moderate-cost plan, is $150.80 per month or about $1,810 per year. This will likely be less if you are nursing.
- Diapers: According to the National Diaper Bank Network, infants need up to 12 diapers per day, which costs about $75 per month, or $900 for the first year.
- Clothing: Babies quickly grow out of their little onesies. In the first year, you’ll likely go through several sizes, which means you’ll be buying new clothes. On average, new parents spend about $50 per month in the first year on clothes for their growing babies. However, that amount could be much more depending on your tastes and budget.
- Health care: The baby must have regular checkups in their first year, so ensure they are covered on your health insurance plan. Copays often range from $10 to $30. However, without insurance, seven visits in the first year can add up to $668 on average.
- Child care: Do you need to enlist the help of a nanny or child care facility? According to a study by the Center for American Progress, infant child care at a child care center costs $1,230 per month on average. Due to the hands-on care required, child care for infants is more expensive than care for toddlers and older children. The national average cost of a nanny in 2021 is about $15.30 per hour, or $612 per week and $2,448 per month.
- Toys/books/media: You may want to invest in ways to keep your child stimulated. The costs for these vary widely, depending on your preferences and budget.
Ongoing Expenses Through Childhood
After the first year, many of the same costs will continue—plus a few more. According to the latest USDA data from 2015, the average cost to raise a child from birth to age 17 was $233,610 — the equivalent of about $272,890 in 2021 (factoring in inflation). That breaks down to about $16,058 per year on expenses that include housing, food, transportation, clothing, health care, child care, education, and miscellaneous purchases.
When you become a parent, you may want to consider life insurance policies. This way, if anything happens to you or your spouse, your child will have financial resources to cover their ongoing needs.
One-Time Expenses Later in Life
Along with all the expenses involved with everyday child-rearing, there are a few other expenses you may face that require large amounts of money. For example, buying a car for your child or helping them pay for college. While you won’t face these kinds of expenses until their late teen years or later, you can start saving early so things will be easier to afford.
When saving for college, a tax-advantaged investment account such as a 529 plan can help you put away money tax-free. Later, you can use that money for all college-related expenses.
How To Reduce the Costs of Raising a Baby
Your budget is going to change with the addition of a new bundle of joy. To try to reduce the costs, you can:
- Review your health insurance plan: Speak with a health insurance agent who can ensure you have coverage for pregnancy and possibly postpartum care. Review your costs and look into minimizing them.
- Register for baby shower gifts: Register for the items you need before your baby shower so friends and family can help to cover the one-time expenses.
- Shop secondhand: Look for secondhand items from friends and family, at yard sales, on Facebook Marketplace, etc. Babies grow through stages very quickly so you can often find lightly-used items at steep discounts.
- Consider child care alternatives: Child care is one of the most expensive costs so if you can reduce the amount of child care you need, you can save quite a bit. For example, it may make sense for one parent to stop working or work from home, or family members may be able to help with babysitting at a lower cost.
- Get your child tax credits: Ensure you get child tax credits you are entitled to. The new credit offers up to $3,600 for children under 6 and $3,000 for those ages 6 to 17.
- Budget your meals: Food can eat up a big part of the budget, but you can save by meal planning, shopping at discount grocery stores, and limiting meals out.
- Shop discount clothing stores: As your baby grows, consider shopping for the clothing items they need at discount stores where you can find brand names at a lower prices.
- Save on taxes: Make use of tax-advantaged savings accounts such as the 529 plan and Roth IRA.