How Much Do Babies Cost? Expense Management for New Parents
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As any parent can tell you, bringing a child into the world means big changes in priorities, lifestyle and finances. According to the USDA, the cost of raising a child from birth to age 18 is $245,340 on average, including food, shelter and transportation. With Quicken Starter Edition, you can easily start budgeting for the child who is about to enter your life. Here are some ways to prepare for baby today, including hard numbers on what you should expect to spend.
Modifying Your Pre-Baby Budget
"The easiest place to start when it comes to creating a budget is to dust off your pre-child budget and use this as a starting point," advises David Almonte, a CPA and CGMA based in Providence, Rhode Island, and member of the AICPA’s National CPA Financial Literacy Commission. "New parents may be surprised to find out that not all of their costs will be going up. Some expenses will go down and can be reduced on your budget with the addition of a child," Almonte says. Dining out and entertainment were the expenditures Almonte noticed reduced in his own experience.
Expenses to Expect While Expecting
On average, new parents can spend up to $6,000 on upfront costs like cribs, car seats, strollers, clothes and toys. If you’re on a tight budget, skipping the premium brands is a good way to keep your total upfront costs down to $2,000 or less. Here are some estimates to get you started:
- Car seat: $50 to $150
- Crib: $100 to $200
- Bottles, bedding and toys: $200
- Clothes: $200 per year
- Diapers: $50 per month
- Formula and food: $40 to $80 per month
- Daycare: $400 to $2,000 per month
Almonte suggests adding to your budget new child-related expenses before you actually need them, and make decisions about what types of products you’ll be buying. "This is a good time to discuss breast feeding versus formula options as well,” he notes, “as these types of decisions could and will impact your budget."
If either you or your partner are taking time off work for maternity or paternity leave, address this in your budget. Depending on your employment situation, you might be entitled to 12 weeks of unpaid leave under the Family and Medical Leave Act.
If you have a good health insurance plan, the cost of prenatal care and delivery should be minimal. If you don't have insurance, you should budget for these costs. Prenatal care will cost around $2,000, and a normal delivery without complications will cost about $9,700. A cesarean section without complications will cost about $12,500.
Saving for the Future
It's never too soon to start setting some money aside to provide a good education for your child. The cost of an education in a public college today is close to $20,000 per year, while private colleges can be $40,000 or more per year. The earlier you start saving, the faster your money will grow if it's invested wisely. Even a few dollars each week set aside today will take a bite out of the expense of college when the time arrives 18 years from now. Use your Quicken Starter Edition software to keep tabs on your savings and identify areas of your budget you can reduce to set more money aside for your little bundle of joy.