Family Planning: How Much Does It Cost to Have a Baby?

October 22, 2019

Budgeting for a new baby can be stressful. Smart Asset suggests the average cost of having a baby­­ can range between $5,000-$11,000––this figure accounts purely for the process of delivery and not the first year of your child’s life. Considering the high cost of simply bringing the baby into the world, it’s no surprise that planning for what comes next can be a head-spinning experience.

We want to help make this process a little less daunting with a few baby budgeting tips. A few financial considerations could help relieve stress about having new costs to work into your budget.

Start with your finances first

Many considerations come into play when you devise your budget based on your habits, recurring bills, and financial goals. The same should take place when budgeting for a new baby. Your baby will grow up and have dreams and goals, just like yourself. It may be a good idea to start building wealth now so that you can help nurture these aspirations as your little one grows.

Take a look at your finances and decide whether it’s necessary to reduce your current spending habits, increase your income, and/or rearrange your finances to account for another person in your family. Depending on what method you take, set goals for what you hope to save and what you’re saving for.

Think about your short, middle, and long-term goals

The United States Department of Agriculture interpreted data by the Consumer Expenditure Survey and found that a middle-class family may spend about $12,980 annually on each child. With a child’s needs growing over time, it’s nearly inevitable that these prices could ramp up year after year. When setting your financial goals, think about the timeframe in which you aspire to achieve your goals.

For the first year of your baby’s life, you’ll want to consider adding diapers, bottles, onesies, books, toys, pacifiers, safety precautions for your home––and the list goes on. These are short term goals and will change and grow alongside your child. Examples of short-term changes could include your child’s changing diet, medical bills, or grooming products.

Midterm goals can be tricky because the duration of savings might not be as clear or could change more frequently. When setting mid-length goals, you might want to consider reoccurring expenses, purchases that might take longer for your child to grow out of, or expenses for which you’d like to always have money on hand. For example, yearly school fees, new furniture, clothes, etc.

Thinking much further down the road, many parents consider contributing to their child’s college fund, developing an emergency fund, or deciding whether they want to help their child with other large purchases. While some of your long-term financial goals may be subject to change depending on your child, you might already have some goals that are more concrete.

Think about these goals and plan for how you intend to reach your short, middle, and long-term goals. Think, also, about where you’d like to be financially as your child ages.

So, how much does it cost?

The final figure of what it costs to have a baby will differ depending on where you live, how many children you have, and what’s important to you. Nerdwallet provides a range of $260,366-$745,634 for raising a child from birth to legal adulthood. The first year of your baby’s life, as detailed by How Stuff Works, also varies but can generally fall around $13,000.

Knowing how to budget for a baby is paramount in being able to enjoy your child as they grow up rather than stressing about finances. With a well-considered plan in place, you’ll have a financial framework you can follow and adjust over time. The planning you do upfront could save you from stress and making important decisions in an uncomfortable frame.

In need of a personal finance upgrade? Take your budgeting to the next level with the best free budgeting tools.

Don’t forget to check out our blog for more solutions to your debt repayment, retirement, and more.


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