How Much Does it Really Cost to Have a Baby?

Does the thought of ten tiny fingers and ten tiny toes leave you feeling happy and content or totally freaked out?

If you’re like most people, it’s probably a little bit of both. After all, having a baby is a big deal, and one that comes with a hefty price tag.

In fact, a 2015 study done by the United States Department of Agriculture found that the cost of raising a newborn through the first year of life for middle-income parents is $12,680.

But that’s not the only number you need to know about. Let's dig a little deeper so you can start planning ahead. 

Hospital costs

When it comes to the hospital stay—which includes labor and delivery charges—get ready to shell out some money before you bring that precious bundle of joy home.

A 2015 Health Affairs Study found that out-of-pocket hospital costs for a low-risk birth ranged from $1,189 to $11,986, with the average being around $4,000.

Make sure to take a good, hard look at your insurance plan. Be sure you understand your maximum out-of-pocket spending, your copay, and deductible. If you have questions about what's covered, pick up the phone and call your insurer.

Look for a doctor and hospital that is “in-network,” which means they are covered by your insurance plan. This can potentially save you thousands of dollars in out-of-pocket costs.

Some insurance plans have different tiers for different providers. If yours does, remember that staying with Tier 1 doctors and hospitals can make a huge difference in the amount of money you’ll need to shell out. Otherwise you’ll face higher copays for office visits, hospital stays, and procedure costs.

One-time expenses

Before you start factoring in the ongoing costs of your future bundle of joy, you'll need to budget for bigger-tickets items that are one-time expenses.

Plan for at least $1,000 (and most likely more) for items including a crib, bassinet, bouncy seat, stroller, changing table, car seat, diaper bag, high chair, to name a few.

Once you’ve purchased these one-time items, it’s time to sit down and budget out the monthly expenses.

Diapers and wipes

Some estimates put the number of diapers you will change each year at 2,700. That’s an average of 225 diapers per month, or $33 to $56 per month ($.15 to $.25 per diaper).

Wipes will run you about $15 to $20 per month.

Formula (if not breastfeeding)

Formula costs an average of $95 to $145 per month for a baby with no special dietary needs.

You’ll also need to buy bottles, nipples, and other accessories that go with bottle feeding. Expect to spend around $15 to $20 per month on those items.

The good news: once your baby moves to solids, this number will change. Thankfully, solid food is much cheaper. 

Clothes

Yes, you will probably get piles and piles of baby clothes at your shower. But you should still expect to have a monthly budget for clothing items.

Plan on at least $50 per month for this expense, which can include clothes, shoes, socks, etc. for the first year.

Childcare

If you or your partner plan on returning to work, childcare will be where most of your money goes. The website care.com says the average in-center care costs are $9,589 per year—or about $800 a month for out-of-home child care.

At-home care can cost as much as $28,354, or about $2,300 per month

Maternity and paternity leave

Childbirth and monthly expenses are only one part of the cost equation. The other critical thing to consider is taking leave from work.

Many companies do not offer paid maternity leave.

However, under the Family Medical Leave Act (FMLA), employers may grant some employees up to 12 weeks of unpaid leave for the birth or adoption of a child, or when a child has been placed for foster care.

To qualify for FMLA, you must work for an employer that employs 50 or more people. You also need to have worked for that employer for a total of 12 months, and worked at least 1,250 hours over that time.

Some employers will allow you to use sick leave for FMLA. But, if you’re taking unpaid leave, you’ll need to calculate your expenses (mortgage, insurance premiums, utilities, groceries, baby expenses, health care costs, etc.), and come up with a plan to cover those costs during your leave.

How to prepare

Yes, these costs can seem overwhelming. One way to find some extra wiggle room in your budget is to look in to refinancing your student loans. Most people are able to lower their monthly payments by over $200, while also saving money over the life of the loan. 

It takes 10 seconds (literally) to see how much you could save. Are you Refi Ready?