Cost of Having a Baby in America

A major and sometimes overlooked factor for anyone deciding whether they are ready to have a baby is the list of expenses attached. From pregnancy up until the child leaves the home, a variety of costs must be taken into account when planning a family. By getting an idea of the average child-related expenditures in the U.S., expectant parents can better plan their baby budget and focus on the extraordinary turn their lives will soon take.

Considerations

Since medical care often accounts for the heftiest expenses of having a baby, whether an expectant parent has health insurance can greatly affect the overall cost of having a child. For the approximately 46 million Americans without health coverage, average figures for childbirth in a hospital range from $5,000 to $10,000. This estimate excludes the cost of prenatal care, ultrasounds, and lab work. Those who have premature babies can expect to pay even more, from around $3,000 for a short hospital stay to hundreds of thousands of dollars for extremely premature infants.

Health insurance can cover much of the cost, but parents will still need to pay deductibles and co-insurance. Checking with your insurance provider will yield more precise figures for these payments.

Types

In addition to sizable medical bills, other costs associated with having a baby fall into the following categories: diapers and formula, nursery, childcare, and first year exams and immunizations.

Time Frame

From the moment a pregnancy begins, so too do the costs associated with having a baby, as the mother-to-be undergoes medical tests and prenatal care. Immediately following the birth, many mothers take maternity leave, creating an income shortage that may be supplemented with savings or other funds.

Conversely, new moms who return to work soon after giving birth can expect to pay anywhere from $2,500 to $4,500 for child care during the first year of their infant's life. According to one calculation, mothers in the U.S. might spend an average of $10,000 during that first year on furniture, clothing, diapers, formula and other necessities.

Potential

Though the costs of having a baby may seem endless, there are ways to cut them down. One money-saving move is to swap regular diapers for the cloth variety, which can be reused multiple times and cost half as much as disposables.

Breastfeeding can also reduce baby budgets considerably, as formula costs between $1,000 and $2,300 per year, depending on the type used. Lastly, parents can save hundreds or even thousands of dollars simply by buying or accepting secondhand baby items, from nursery furniture to clothes.

Expert Insight

Although the majority of parents-to-be fail to create a baby budget, financial experts stress this crucial step in family planning. VISA USA Vice President Rosetta Jones was quoted in Redbook Magazine as saying, "The smartest thing you can do is sit down before you have your baby and map out a financial plan."

This process is made easier with the emergence of online baby budgeting calculators, found at sites such as practicalmoneyskills.com and babycenter.com.

Resources

• This page gives straightforward info on child-rearing costs.
• A cost calculator to determine baby expenses.
• Helpful women's magazine article.