The joy and love of a new baby are priceless. But what about the costs that go along with raising your child? Whether you’re already expecting or simply planning the next few years with your partner, it’s important to know the expected costs of having a baby and raising a child. Here’s the breakdown of what you can expect to pay from pregnancy up to college preparation.
How much does it cost to have a baby?
The total medical cost of having a baby in a U.S. hospital is typically around $18,865 according to Forbes. That number depends on a variety of factors, including:
The type of delivery
According to US News, C-sections are more expensive than natural deliveries and have become 500% more common since the 1970s.
Whether you have health insurance
If you have health insurance, your out-of-pocket costs are generally lower and are based on the coinsurance or co-pay for your specific plan.
According to the Forbes article above, the average out-of-pocket cost for natural (vaginal) childbirth was $2,854 for women with health insurance. The national average for a C-Section is $3,214. However, depending on where you live, the costs can vary. In the District of Columbia, the out-of-pocket expense for a natural (vaginal) birth is $1008, which is less than 46% of the national average. In Nebraska, you might pay $2,670, which is 41% above the national average.
Remember, delivery costs don’t include complications or extra care. They also don’t factor in the cost of prenatal care, which can vary based on your insurance and is essential for a healthy pregnancy.
Beyond medical costs, you’ll need to account for an infant car seat, which the law requires, a stroller, baby carrier, and diaper bag. You’ll also need a crib, clothes, diapers, nursing equipment, and more.
What is the cost of raising a child?
According to a Brookings Institute study referenced in Investopedia, Middle-income parents will spend an average of $310,605 by the time a child turns 17 between 2015 and 2032. This amount does not include paying for higher education, which can easily add $80,000 to $100,000+ per child.
Housing and transportation
The Washington Post has an interactive calculator which you can use to estimate child spending based on your annual income and the age of your child between birth and 18. Based on a $25- $50k annual income and depending on where you live, you might pay 33% of your income on housing.
Nursing or formula feeding? That choice comes with a big price difference during your baby’s first year. Depending on the brand you choose, you might pay between $821.25 and $2,920 for one year of baby formula. While nursing may be free, extras like pumps and bottles add up quickly.
Babies go through a whopping average of 2,500-3,000 diapers in their first year, so be prepared. If you’re using disposables, expect to pay about $500 and $900 during the first year, according to Parents Magazine. Alternatives to disposable diapers include washing them yourself or paying for a diaper service.
According to Investopedia, the average cost for baby clothes is about $56 per month. Over the years, all those toddler overalls and pairs of shoes will add up to about 7% of your total child-raising cost according to the Post calculator.
Around 21% of your funds for raising a child will go toward the cost of childcare and education, according to the Washington Post child spending calculator. Daycare and nannies can be expensive if you and your partner both work. You may also want to factor in the cost of parental leave, especially if you’re self-employed or your employer doesn’t cover it.
How much should you save for your kid’s college?
According to Investopedia, if you plan on helping your child through college, you can expect to pay an average of $22,690 a year for a public university and $51,690 for a private one, including room and board. While saving for your kid’s college education, you may consider setting aside additional funds through a 529 college savings plan. Learn more about budgeting for your baby’s college fund.
Does the cost of raising a child differ based on where you live?
According to the USDA study, the total cost varies based on where in the U.S. you’re planning to raise a family. The urban West, South, Midwest, and families in rural areas had the lowest child-rearing expenses at 27% lower than in the urban Northeast which had the highest costs.
Life insurance can offer financial protection and lifelong peace of mind if you’re a new parent. And nothing is more important than taking care of the ones you love. Learn about life insurance for new parents.