September 3rd, 2021 | Updated on October 18th, 2021
Bringing home a new addition to your family can be exciting and cause for celebration, but also can be financially overwhelming.
This tiny bundle likely means big changes and major expenses for new parents, and if you already have debts or haven’t yet met your financial savings goals, it can mean extra stress.
According to a USDA report, the average family spends between $12,000 to $14,000 each year on child-related expenses.
The cost is higher for newborns because of labor and delivery costs and the number of one-time expenses you’ll have, reaching $20,000 to $50,000 or more, depending on your income and purchase choices.
The good news is you can get ready in advance by knowing how much you can expect to spend immediately before and after bringing the baby home, as well as how to financially prepare before they arrive.
While what you need depends on the parent, here are a few things you may pay for to help you budget.
According to the Health Care Cost Institute, a regular delivery in the U.S. averages about $14,000 when using an in-network provider, though this could vary by state and your insurance coverage.
Other than the actual labor and delivery, there are a number of additional costs you must factor in, including the hospital stay, meals, induction, anesthesia, monitoring, or even a stay in the NICU.
Talk to your doctor, the facility, and your insurance company ahead of time to get a better idea of what your out-of-pocket costs may be.
These days, hospital births are not the only option. In fact, research shows the share of births that happened at home (in the U.S.) increased by nearly 80% from 2004 to 2017.
Even if you choose not to have your child in a hospital and opt for a home birth, you’ll still have costs associated with doing so.
A home birth can cost anywhere from $3,000 to $9,000 if not covered by insurance, though that fee often covers prenatal, birth, postpartum and newborn care, according to Parents.com.
Additionally, there are a number of things to buy to prepare yourself and your home for the birth, such as birth kits, cleaning supplies, bed sheets and more.
These costs can add up quickly, so it’s important to compare your options and choose the one that’s best for you and your family.
2. Child Care
If you return to work or find that you need regular child care, these expenses can add up quickly. While the average cost can vary by state, you may pay up to $1,000 or more per month for full-time daycare for babies and toddlers.
According to a recent Care.com survey, 85% of parents surveyed say they spend 10% or more of their household income on child care.
Overall, the average child care cost for one child in 2020 was $340/week for child care or a daycare center.
If you want to hire a nanny, you may pay more. Nannies may cost $500 to $600 per week or more, averaging close to $2,500 or more per month.
These expenses can also depend on your situation. If you primarily breastfeed, you may only have one-time expenses of a breast pump and some bottles, nursing bras, and tops.
To store breast milk, you likely will need cleaning equipment and storage bags. If you choose to use formula, that cost may average around $1,200 for the first year. You also may want a breastfeeding pillow, burp clothes, or capes.
At about 4 to 6 months you may start introducing baby food, which averages around $50 per month. Then, you’d also need a high chair, bibs, baby spoons, and other eating accessories.
Within the first 30 days of bringing the baby home, you should add them to your health insurance. This helps ensure you have coverage if your baby is sick or needs other routine medical care.
You also should consider purchasing a new life insurance policy or increasing an existing one. Talk with an attorney or life insurance agent to make sure you have a policy that would cover all of your child’s needs should something happen to you.
5. Ongoing Health Care
You and your baby will need ongoing medical care after you come home, including regular wellness checks, vaccinations, and treatment of child illnesses that you may come in contact with.
These checkups are important to ensure you and your baby are healthy, but costs can add up, so check with your doctor and insurance on your specific anticipated out-of-pocket costs.
The average baby goes through 10 diapers per day, so you’ll be spending a lot on this product. Even if you use reusable cloth diapers, you’ll still have the ongoing expense of cleaning.
For disposable diapers or cloth diaper services, you’ll spend about $75 to $100 per month. Or, if you wash cloth diapers yourself you may pay less.
Add in wipes and diaper rash cream and that’s another $20 to $30 per month.
If you have friends or family who can pass baby clothes down to you, that can be a huge help when it comes to ongoing expenses.
Babies are messy and may go through two or more outfits per day. They also grow quickly, meaning they will outgrow their clothes even before they have a chance to wear them sometimes.
Shopping at thrift or consignment stores, or buying larger sizes at end-of-season sales, can help save you money on clothing.
8. Furniture And Other Items
A crib, stroller, changing table, baby monitor, rocking chair, bedding, car seat, and other miscellaneous items like a diaper bag can be significant expenses.
While most of these are only one-time expenses, they are definitely something to plan for. Each of these large items could cost several hundred dollars or more each, or if you choose designer options, they might cost in the thousands.
To save money, shop sales for these items. Talk to family and friends to learn if they have any they can pass down to you. For furniture items like a table or dresser, check out local garage sales or consignment stores.
You could also put these items on your baby shower registry, which would save you money since you won’t have to purchase them yourself.
9. Toys, Books And Other Stimulation
Infants need constant mental stimulation to help them grow and develop. You’ll also want to keep them entertained while you do other things.
Baby toys are designed for learning and stimulation of the senses, and you’ll want to purchase toys appropriate for their age and levels.
While you can purchase top-of-the-line new toys, you also can find gently used toys at garage sales, consignment shops, or hand-me-downs from friends and family.
Caitlyn is a freelance writer from the Cincinnati area with clients ranging from digital marketing agencies, insurance/finance companies, and healthcare organizations to travel and technology blogs.
She loves reading, traveling, and camping—and hanging with her dogs Coco and Hamilton.