When my husband and I decided to start a family, I approached the process like I do everything in my life, with careful planning and research. If I was going to bring a child into this world, I wanted to be prepared. I wanted to have a savings account in place, and I wanted to make sure not to go back into credit card debt after successfully pulling myself out of it.
The problem was that every time I asked someone how much money I should save for a baby, everyone had a different answer. Not only did they have different answers, their answers were on opposite ends of the spectrum.
The personal finance community had post after post about how children don’t need to cost that much money. To many of them, the idea of spending $245,000 raising one was preposterous. My mom told me you could never have enough money so don’t worry about an actual number. Many of my friends just seemed to wing it or put their expenses on a credit card to worry about later.
So, since no one seemed to be able to give me a number, I set out to find the number on my own.
This was the most important cost that I considered, and it’s one I urge all potential new parents to carefully research. Adding our children to our health insurance plan cost an additional $2,000 per year, and the out of pocket max for our health insurance was $4,000.
I ended up being pregnant with multiples, which required far more exams, ultrasounds, and tests than the average single pregnancy. Not only did we hit our out of pocket max of $4,000 in addition to the $2,000 to add them to our policy, but we had countless other extra expenses related to their health in terms of prescriptions, gripe water, baby Tylenol and other various products that parents purchase to try to make their baby stop crying or feel better in general.
If parents want to prepare fully in this department, I would recommend having your health insurance deductible and out of pocket max ready to use in a savings account. If that is not possible try to save as much as you comfortably can.
In general, based on my own experience and that of friends and family, having $5,000 saved to prepare you for any and all possible medical issues as well as to pay to add your child to your health insurance policy would be a good start and would make you feel safe and prepared. Feel free to adjust this number up or down depending on your own situation.
The Nursery, Clothing, and Other Gear
Someone will likely throw you a baby shower for your first baby. At this baby shower, you will likely get most of the clothing, car seats, high chairs, and nursery items that you need. We went to IKEA and purchased about $400 worth of items, like bookshelves and picture frames to decorate the nursery. Some people can spend $1,000 on a designer crib, but we were cost conscious. I found my changing table for free on Craigslist, and our cribs were from Wal-Mart. I purchased most of their clothes second hand or at outlets for about $100, and they went through them faster than you can imagine.
Obviously you can spend as much or as little as you like here, but brand new babies really do not need that much. Most people don’t even put their babies in a crib until a few months in (even though we put ours in their cribs from day one.) Instead, they buy a bassinet and place it next to their beds. If you can let go of the idea of having the perfect designer nursery, you can really save.
Again, this is one category that is very flexible, but having $500 to take care of items in their nursery, clothes for their first few months, and items you did not get at your showers should be adequate if you save, get creative and accept hand-me-downs.
We opted to use cloth diapers, which will save us $2,000 with our twins. However, that’s a personal choice and again, most people will use disposable diapers. Sure, you’re going to get lots of diapers as gifts, and maybe your family members will buy them for you. However, if you want to save money for this just in case, you should also include the cost for wipes and various medicines and diaper creams to fight diaper rash if your baby gets it. Lots of people use coupons and score awesome deals to get diapers on sale so if you use some coupons and then factor in last minute exhausted runs to the store to buy them full price, $30 a month or $360 for the year is a good estimate for one baby.
Feeding Your Baby
Many people like to say that breastfeeding is free, but there are costs associated with it. I used Target gift cards I got from my shower to buy maternity tanks, maternity bras, creams, etc. to help make the process easier. I also bought a pump and storage containers for breast milk. Some people choose not to pump at all but I had to since my twins were in the NICU for two weeks unable to breastfeed. Again, you won’t know about these potential issues until they happen, so it’s important to save for them.
If your baby has trouble breastfeeding or you need to supplement or just want to feed them formula from the start, that’s a cost to factor in too. Some babies end up having health issues or milk allergies that require specialty and very expensive formula. Some health insurance plans cover this and some don’t. Again, you won’t know what your baby is going to do or how they will respond to milk or formula until you try it. I advise saving $1,000 for costs associated with the early days of feeing your baby, which would give you a great head start if you decide to formula feed and would be a cushion if you decide to breastfeed.
Child Care/Household Help
This is one category most people consider when they want to have a baby. Do an estimate of childcare in your part of the country and put it into a baby cost calculator to get the best idea of how much it will affect your budget. Consider that during the first few weeks, you’re going to be a walking zombie so it would be nice to have someone to take care of your dog, clean your house, or play with your older kids if you have them. This is going to vary for everyone but I would advise stay at home moms to still have someone in mind to come watch their baby if they need a break, even if it’s for two hours in the afternoon. Some people have family who will help them for free, and some people live across the country from their families like I do. Again, $1,000 in childcare savings to start would cover the first month or two of full time day care or a few months of part time care to help give you a cushion and ease your transition into parenthood.
The Grand Total
If you add up all of these categories, you get a good, safe number to save for a baby. Keep in mind this will not cover all of your expenses for the first year. This is just to help you get what you need and some of what you want before they arrive. This is also to help you with some of your childcare and medical bills so that the numbers aren’t so shocking when you encounter them.
Sure, you could always save more to feel comfortable and you could always save less and get by. However, just saving something especially if it’s the amount below will allow you to feel safe and ready to bring a child into this world. It will also help get you through the first few months, which are truly the toughest.
- Healthcare: $5,000
- The Nursery and Baby Gear: $500
- Diaper Gear: $360
- Feeding Your Baby: $1,000
- Childcare and Other Help: $1,000
Grand Total = $7,860
We personally saved $10,000 for our twins, and I can tell you we used every single penny of it and more thus far in the first nine months of their lives. We’ve been as frugal as possible and we’ve saved ahead of time for the big items, but we definitely believe that children are expensive and that everyone should save money to be prepared to take care of them.