Cost of Having a Baby

Can you afford to have a baby?

It’s an age-old question people have been trying to answer for generations. Preparing for a baby often means taking a look at your finances and determining the added costs of adding to your family.

When you first examine the cost of a baby – up to $12,000 in the first year, according to a USDA study – it can certainly seem out of reach for many couples. The added costs of bringing a baby home also come at a time when one or both parents may be taking time off work, sometimes at reduced or no pay.

Advice for New Parents for Bringing a Baby home Affordably

Like getting your body ready by taking prenatal vitamins or kicking unhealthy habits, there are steps you can take before baby arrives to ensure the financial health of your family.

  • Get up to speed on your health care plan. Not all health care plans are created equal and not every plan covers every part of your care. Read the fine print on yours to better understand what charges will be covered and how much you will need to budget for copayments and deductibles. Also look into increased costs for adding a child to your health insurance policy. The costs of having a baby aren’t just preparing for them to come home. Budgeting for the cost of your pregnancy will be great practice for budgeting for baby.
  • Speaking of budgets, balance yours – or if you don’t keep a budget, start one. Getting control of your finances begins with an understanding of how you’re spending and then making more informed choices. Have credit card debt? Start to pay it down now. Thinking of staying home with baby after she’s born? Try living off a single income now, before baby is on the scene, to get a better understanding of the real choices – and sacrifices – you’ll need to make in your day-to-day spending. Take a look at a Baby Cost Calculator to get an idea about the costs of a child per year.
  • Make smart choices when buying for baby. New parents are especially prone to buying anything and everything for their new little bundle of joy. However, when it comes down to it, many of us overspend, often to the tune of thousands of extra dollars.

Baby-planning experts recommend spending more on high-use items such as cribs and car seats, but spending less on non-essentials. It also helps to go shopping with a friend or family member who is already a parent. It’s easy to get caught up in all the cuteness, but an experienced parent will help guide your choices toward the practical, saving you money in the long run.

The initial and ongoing costs of having a baby may seem daunting, but by using tools such as baby calculators and budgets, you’ll be well on your way to preparing for your baby, bringing them home, and raising them for the next 18 years. If there is one piece of advice for new parents that’s true for anyone, it’s that there is never the perfect time to have a baby. But you can be prepared, physically and financially, to take this exciting step of growing your family.

Sources: Parenting Magazine, 2014; WebMD, 2014