The Cost of Bringing Home Baby
Yikes, That New Baby Isn't Cheap
People always remember what the price of a gallon of milk is -- you’ll now probably be tracking the price of diapers.
— Alan Fields, consumer advocate and co-author of "Baby Bargains."
A baby’s arrival delivers to parents a bundle of tender images and dewy-eyed moments. Beneath the sweet cooing, gentle nuzzles and cute smiles, however, is a less-than-charming reality: the exorbitant expenditures necessary for a baby’s care.
Although a baby shower gift registry might allow parents to chip away at some of the “start-up” costs, experts and economists suggest that parents acquaint themselves with the essential expenses that will remain after you've opened all the gift boxes from the party.
Bird's-Eye View
The average household can expect to spend between $10,950 and $30,640 per child each year, depending on the family's income, according to a 2011 report by the U.S. Department of Agriculture.
“If it’s the first child, you're going to spend more -- about 25 percent,” USDA economist and report author Mark Lino said. “If you have more children, you get economies of scale; you have hand-me-downs in terms of clothing, toys, a crib.”
Those costs increase as the child grows up, Lino said.
Spending for housing consistently comprises the largest proportion of a family's annual child-rearing expenditures, Lino said. In 2011, housing represented 30 percent of a family’s spending; which has been roughly consistent since the USDA began collecting this data in 1960.
Of course, not every couple buys a new home when they have a baby, but some buy with a baby in mind before the birth or move once a baby enters the picture.
“Although some people cannot move when they have a kid, some people feel like they need to move into a bigger house or move into a good school district, and so housing costs are really an issue,” said Nancy Folbre, an economics professor at the University of Massachusetts at Amherst who writes on family economics.
Child Care
If both parents work, eventually they are going to have to find a child care provider, which costs -- a lot.
“In 1960, most families didn’t have child care (expenses),” Lino said. “It only constituted 2 percent of the overall expenditures on children. Child care in 1960 was mostly baby-sitting in the home when a parent went out. Given the advent of women in the labor force, that has changed over time. It’s now, for newborns, one of the major expenses on children.”
In 2011, child care represented 18 percent of the family’s expenditures. Consumer advocates Alan and Denise Fields, who have been writing about cost-saving strategies for parents for more than 20 years, estimated that day care in 2011 cost $15,000 to $24,000 a year. For parents who employed a nanny, the cost ranged from $17,500 to $52,000 annually. Finding a neighbor or family member to baby-sit helps parents save substantial money.
Diapers
Focusing on the big-ticket items such as child care and housing obscures everyday concerns new parents will face. Diapers, anyone?
A newborn averages 2,300 diaper changes in its first year of life, said Alan Fields, co-author of "Baby Bargains," now in its ninth edition. In the first months, a baby can easily go through 12 diapers a day. And diapers, perhaps unsurprisingly, “don’t tend to go on sale like other things go on sale,” Fields added.
As of 2013, diapers vary between 14 cents and 23 cents each, Fields said. Grocery stores are the second most expensive place to buy diapers, after convenience stores. Club stores such as Costco and Sam’s Club are less expensive, but parents have to figure in the membership costs. The least expensive outlets are big chain stores such as Babies R Us, Wal-Mart and Target, Fields said.
“Consumer Reports” cautioned against buying economy packs of newborn diapers just after birth because the baby likely will quickly outgrow the newborn size. The magazine recommended buying one 40-count package of newborn diapers for a baby weighing about 8 pounds at birth; for a larger baby, start with a single package of "size 1" diapers, "then buy in volume after you find the brand you like best."
Food
Food is another major area of spending, ranking third highest as a proportion of child-rearing expenses. In 2011, food accounted for 16 percent of parents' expenditures for a child, according to the USDA. For infants, food costs fall to fourth place, just after transportation expenditures.
Fields estimated that parents will spend approximately $960 on baby food and formula during the first year. They can mitigate food costs by breastfeeding, which, Fields joked, is “free, sort of.” Mom and Dad don't have to buy baby food, he added; they can make apple sauce or puree other foods appropriate for babies.
The baby-food stage usually starts around four to six months, and progresses from rice cereal to baby foods. “After they reach roughly a year, they should basically eat what you're eating, cut up,” Fields said.
Car Seat
Fields estimated that parents receive only 25 percent of the baby items they need at baby shower. They'll have to shop for the rest of their newborn's needs, such as car seats.
Those seats aren’t cheap, ranging from $50 to $350. That's one of the items new parents will want to knock off their list at the baby shower if they can, Fields said. Children will go through several car seats in their lifetimes, Fields added, noting that infants usually outgrow their first car seats between six months and a year old.
One of the big advantages modern parents have, Fields said, is online shopping. “It is a big, key component today because you can instantly compare prices,” he said.
Price-tracking in general might be a new step for parents. “People always remember what the price of a gallon of milk is -- you’ll now probably be tracking the price of diapers,” Fields said. “Tracking some of those key costs will be good.”
Beyond that, evaluating what you can borrow from family and friends is a cost-saving idea that’s “absolutely acceptable,” Fields said. And drawing up a budget for some of the key expenditures will save you money in the long run, he added.
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