Banking

How Much Does It Cost To Have a Baby?

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Traditionally, a newborn is portrayed as a bundle of joy, cooing serenely inside their crib. But your mental picture should also include a price tag.

So, how much does it cost to have a baby? The total cost of pregnancy, delivery and postpartum care ranges between $14,768 and $26,280, according to research from The Peterson Center on Healthcare and the Kaiser Family Foundation (KFF). Most of this cost, though, is covered by insurance; out-of-pocket (OOP) expenses average between $2,655 and $3,214.

Read on to find out more about these costs and how to pay for them.

Cost of having a baby

The average cost to have a baby itself includes prenatal care, delivery and postpartum care. The average expense in the U.S. for all these services is $18,865. Insurance, however, typically picks up an average of $16,011, so the average OOP cost if you’re insured is $2,854.

However, the cost varies significantly by type of delivery. A cesarean section or C-section is substantially more expensive than a vaginal birth. For a vaginal birth, the average total cost is $14,768, with $2,655 of that in OOP costs. Insurance generally picks up $12,113.

The average total cost for a C-section is $26,280, with $3,214 OOP costs. Typically, insurance picks up $23,066.

Qualified health insurance plans like those from the Health Insurance Marketplace® and Medicaid are required to cover the medical costs of pregnancy and childbirth.

Saving for a baby

So how do you budget not only for having a baby but raising a child? The average cost of raising a child through the age of 17 is $233,610, according to the U.S. Department of Agriculture. (Before you throw in the towel at the prospect of saving that many thousands of dollars, remember that those costs are spread over a number of years.)

How to save for a baby using a medical savings account

You can use a flexible spending account (FSA) or health savings account (HSA) to save for the OOP share of prenatal care, delivery and postpartum care, plus other health care expenses throughout your child’s life (including premiums, copays and deductibles). Both types of plans take money from your paycheck before tax, so you save money on taxes.

Here are some key differences between FSAs and HSAs.

FSAsHSAs
Offered only by employersOffered to anyone with a high deductible health plan (HDHP)
Must use funds in a certain time frame, generally by the end of the plan yearCan keep and use funds forever
Not transferable to another employerCan contribute up to $3,650 (for an individual) or $7,300 (for a family) to a HSA in 2022
Can contribute up to $2,850 pretax to a FSA in 2022

Be sure to weigh carefully which one works for you; you usually can’t choose both. Consider whether a FSA or HSA is best for you. If you decide on a HSA, review our list of the best HSAs.

How to save for a baby using an emergency fund

The imaginary price tag attached to that tiny bundle isn’t just a total of expected expenses, of course. That’s why an emergency fund for childbirth and postpartum care is important. Emergency funds are where you save money for sudden and unexpected events outside your usual expenses.

A high-yield savings account is a smart place to stash your emergency fund because they’re easily accessible while letting you earn a higher-than-average savings interest rate.

How to save for a baby using a savings account for kids

It’s also wise to look into ways to save with your child once they’re born. Many banks, like Capital One, allow you to open an account with your child when they’re a baby. It’s a way to compound money over time and build good savings habits in your growing child. Review our list of the best savings accounts for kids.

Saving and budgeting for a baby can be complex. Consider consulting with a financial advisor regarding your plans, goals and how much to save for a baby. They can also give you advice on savings vehicles, FSA and HSA plans and more. You can also seek out free financial advice.

Frequently asked questions

According to research from The Peterson Center on Healthcare and KFF, the average cost of having a baby in the U.S. is $18,865 total. For insured folks, insurance covers $16,011 of that, leaving the average OOP cost at $2,854. This cost includes prenatal care, delivery of the baby and postpartum care.

Insurance generally covers the medical costs of pregnancy and giving birth to a baby in the U.S., even if you were pregnant before being insured. You’re definitely covered if you have a qualified health plan inside or outside the Health Insurance Marketplace® or Medicaid — they must cover maternity and newborn care because they’re considered essential health benefits.

There are rare cases when insurance may not cover the cost of having a baby, like if you’re grandfathered into a plan without this benefit. Check with your insurance company to confirm how you’re covered.

The average cost to raise a child in the U.S. is $233,610, but that’s until your child turns 17. Your savings depends very much on your individual financial circumstances and the cost of living in your area. It can be a good idea to consult a financial advisor regarding budgeting and saving for having a baby.