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Updated on Tuesday, October 13, 2015
If you’re a veteran parent, are expecting a child, or are simply planning ahead for the future, then you’ve already likely experienced at least some of the exciting emotions that come along with family planning. A new baby ushers in a whirlwind of emotions that swing from excitement to anxiety on a moment’s notice. A baby is not only a new family member, but a new life, and one for which you’re responsible.
Some couples choose to wait until the right financial moment to start growing their families. Whether you’re an avid planner or not, it’s still important to sit down before the baby’s arrival to calculate the impending costs. There are many financial aspects to raising a child – especially within the first year – that are important to consider when planning out your baby budget. Let’s take a closer look at some of the costs that many parents will experience within the first year of baby’s life as well as different ways to reduce these financial burdens to ease the strain on your family’s finances.
Insurance and Medical Bills
Before baby is even born, you’ll begin to rack up charges for medical bills. Regular doctor’s visits typically require a copay (depending on your insurance), while other specialty visits for sonograms, vaccinations, laboratory testing, and the like will also start to slowly dwindle away your cash. Your insurance plays a large role here in how much you’ll be paying for each visit as well as how much you can plan to pay in total for your deductible to be met.
How can you make this more affordable? You have some say in which insurance company you pick, and opting to use insurance offered by an employer typically means that the employer will pay part of the cost of that insurance every month. Be sure to pay close attention to the deductible limits as well as maternity care costs and how much you can expect to pay (typically a percentage) after you’ve met these limits.
When choosing your doctors, always check to be sure that they’re in network with your insurance company. When you choose medical providers that are out-of-network, you’ll likely end up paying substantially more than if you stuck with somebody who was in-network. For instance, an in-network laboratory testing may only require that you pay a copay amount. These amounts are typically pretty low, especially compared to the price you’ll pay out of pocket if you choose an out-of-network provider.
Keep in mind that many insurance providers will automatically add your newborn to your plan for 30 days after, but you’ll usually need to contact your HR department (if insurance is through your employer) as soon as possible after the arrival of your baby to get him or her added to your plan.
Formula, Diapers, and Supplies
If this is your first baby, then you may have had the luxury of a baby shower where many of your initial supplies have been covered by the goodwill of family and friends. But there’s always something that you realize was missed, and for those having their second or third child, many of these supplies will need to be purchased by the parents. So what does it actually cost for many of the basic supplies?
For formula (if you’re not breastfeeding), one can likely expect to spend about $60-$100 per month (according to BabyCenter) which totals about $720-$1,200 for the first year of life. Other estimates put this first year cost at closer to $1,700.
For diapers, it’s estimated that disposable diapers will run you around $30-$85 per month for a yearly total of $360-$1,020.
How can one make this more affordable? Many first-time moms will likely be inundated with coupons in the mail before baby even arrives. Be sure to utilize these where possible for diapers and formula, and ask on online yard sale websites and other forums for unused coupons from other moms too. If you’re opting to breastfeed, then the cost of formula is $0, but you’ll want to consider the costs of nursing covers, absorbing pads, and a breast pump (although pumps can be covered by insurance, cutting out that cost as well). If you’re opting to use cloth diapers, then you’ll spend a little more money off the bat (each disposable diaper can run you anywhere from $25-$60 or more, depending on the type and brand you choose), but after that initial purchase, you simply just calculate the costs of extra laundry loads and liners.
Beyond diapers and formula, you’ll also have varied costs of clothing, gear, and other accessories, which depends on what you already have, what you think you need, and what you prefer to purchase. Sticking to the essentials will obviously cut out more of the financial burden than somebody who prefers to purchase all of the available accessory items and gear, so those looking to save a few dollars will want to purchase the basics and only splurge when items go on sale.
Ultimately, the Costs All Depend on You
Your first year costs for a baby – including medical bills, insurance, formula, diapers, accessories – can vary drastically depending on how you go about purchasing items and how careful you are when selecting these items and providers. According to a 2010 USDA report, the average middle-income family will spend roughly $10,000-$12,000 on child-related expenses in their baby’s first year of life. Cut down on some of these costs by making wise, thought-out decisions instead of splurging on tempting, but unnecessary, baby items, and always be on the lookout for ways to cut back when possible. Check out BabyCenter’s First Year Cost Calculator to get a better grasp on your expected costs, and find avenues for cutting back on different areas to bring your total to a manageable level.