This post is part of Women’s Money Week 2012. For more posts about budgeting see Budgeting Roundup.
There are a lot of online calculators that will approximate for you much much having a baby will cost you in the first year of his life. This cost of raising a child calculator was pointed out to me yesterday by Kellyology.
But honestly, every family’s budget will be different depending on your family situation. Other than the ways you will save money by having a baby, here are other categories of your budget you should adjust:
1) Health Care
By far, the biggest expense of having a baby comes from increased health care costs. Many health insurance plans will cover prenatal visits 100% (or with a copay); labor and delivery is a different story. Both the delivering mother and the baby will have health care expenses. Plan to spend your entire out of pocket maximum for the year on both people. (So if your out of pocket maximum is $2000 – you’ll spend $2000 for both the mother and the baby – totally $4000). Very few health insurance plans cover labor and delivery 100%. Our health care expenses – before insurance – for a very standard labor and delivery (e.g., no drugs or c-section) cost over $13,000. Most of these expenses were for the 2 day inpatient hospital stay. (Did you know that “room and board” for just your baby – staying in your hospital room with you – is over $1500 each day? I still can’t get over this)
Besides labor and delivery, a baby has to go to the doctor numerous times in his first few months of life. Again, depending on your insurance plan, this will cost you money. You’ll either have co-pays or co-insurance.
2) Feeding the Baby
Whether you’re breastfeeding or formula feeding or some combination of the two, feeding the baby will cost money. If you’re breastfeeding, you’ll likely need a breast pump which costs several hundred dollars. (Though check with your insurance. Our Minnesota Blue Cross Blue Shield insurance covered most of the cost of a breast pump as long as the hospital ordered it.) Bottles cost money – which you’ll need if you’re pumping or formula feeding. And you may need visits to a lactation consultant if you breastfeed. If you formula feed, then you are obviously paying for formula – which is not cheap either.
3) Diapering the Baby
The absolutely cheapest way to diaper your baby is to get used cloth diapers (check craigslist – and clean them well with bleach!) and do all the washing yourself. We opted for a diaper service which costs about $20/week (and includes diapers, diaper covers, pail, and weekly delivery of unlimited diapers.) If you use disposable diapers you’re looking at 20-50 cents per diaper depending on what kind of diaper you use. In the first few weeks of our son’s life, he went through about 15 diapers a day – so even with the cheapest disposable diapers we would have been saving money with the diaper service.
4) Clothing the Baby
Baby’s clothes are less expensive that adult clothes, but if you buy all new the costs add up. Try garage sales and ask your friends for their clothes their children have outgrown. Otherwise, budget for clothing your baby.
5) Clothing the Mom
The birth mother is going to need both maternity clothes for before the baby’s born, but then also new clothes after he’s born. (It takes a little while to get back down to “normal” size.) Plus, she’ll need nursing bras and tanks if she’s breastfeeding.
6) Household Supplies
When you’re home with your baby, you use a lot more stuff around the house. The dishwasher and laundry get run almost daily. Even things like handsoap and toilet paper get used a lot more. Plan on a lot of trips to Target.
7) Lost Wages
Most moms who are on maternity leave get some sort of “short-term disability” payments. These typically don’t pay out 100% of your wages. Plus if you are going to work part-time for awhile before starting back full-time, account for lost wages here.
There is a lot to think about when budgeting for a baby. What else did you have to budget for that’s not covered above?
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Maternity leave took a big bite out of my finances when my daughter was born in 1989! Because I was a few weeks shy of earning disability (which was probably 2/3 of my salary), I had to take unpaid leave or what would now be known as FMLA. I worked as long as I could handle it, and went back to work at the 6-week checkup. But my daughter went past her due date and I had a total 8 weeks no paycheck. Her dad was juggling community college and part-time work, so maternity leave was a huge hit to our income. And yes, it took several months to pay off the out of pocket medical expenses.
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