Yesterday, LearnVest (a cool financial blog for women) offered a post about the true cost of a child to age 18, and offered some tips for preparing for a baby. The post includes a cool info-graphic that outlines the USDA’s tally. Learnvest says:

“Take a deep breath: According to the U.S. Department of Agriculture, a baby born today to a middle-class family will cost about $221,000 by the time she turns 18—not counting college! For more info, look at a detailed breakdown of child-rearing costs. Before you fall into a dead faint, remember that you won’t shell out that whole sum at once.”

Child Cost Breakdown
The biggest portion of the child expenses is housing, which you’d have to pay for anyway, however housing may cost more once you have a child. Many families opt for a bigger house. Most of us don’t want to be living in a one-bedroom with a two parents and a 15-year-old!

If you really think about, most of the costs the USDA details are manageable over 18 years. It’s just $12,777 a year. Obviously, children are most expensive in the early years when they need childcare unless one parent can work from home or become a stay-at-home parent. The expenses ease up a bit once children start school and are old enough to watch themselves. But that doesn’t last long, because then come the teen years, with cars, pricier clothes, and gadgets galore.

Preparing for Baby Costs
The next portion of the LearnVest post offered six tips for preparing for baby costs. The first one made people go nuts! It was: “Plan to have at least $20,000 in the bank at the outset.”

Most people were outraged at the very idea that they should have to save a lot of money for a baby. And it’s true, many families don’t. However, do you really want to start your new baby’s life by going into debt just to get her out of the hospital? Even if you have insurance, there will likely be some cost. Most insurance plans require a deductible. Some plans have an additional maternity deductible.

Then there are things like diapers, extra food for you if you breastfeed, formula if you don’t, baby clothes once the baby grows out of all that adorable stuff you received at your shower, medical insurance premiums, etc. Yes, you can save by choosing cloth diapers, breastfeeding, and making your own baby food, but there will still be expenses, even if you’re super-frugal.

That figure also includes childcare. If you already have childcare worked into your budget, then you may not need to have $20,000 in advance, but plan to spend around that much for first year expenses all together. Pay as you go is one option, and it works if you budget carefully, but it never hurts to have a little extra in ye olde savings account either!

My husband and I are heading in the general direction of parenthood and we’ve already started working on our budget and plans. So far we’ve: bought a house with room for a nursery/child’s room, made plans to replace my car with one that will fit a stroller/baby-seat, decided on cloth diapers, budgeted the cost of childcare, and decided to make our own baby food once it’s on solid food. And I’m not even pregnant yet! If you’re considering children, it’s never too soon to start planning for that event. Save now, while you can.

Comments

3 Responses to “How Much Does a Baby Cost?”

  1. Alexa on July 1st, 2010 7:08 am

    great post– appreciate your point of view, especially on this point: “do you really want to start your new baby’s life by going into debt just to get her out of the hospital?” thank you for taking the time!

  2. Pat Chiappa on July 1st, 2010 1:48 pm

    I saw this article too and was shocked! I sent it to my sister who has one child and is considering having another – on just one income – in NYC! I’ll be it will make her think twice…

    My husband and I don’t have kids – we’re gonna be loaded!

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