New parents can expect to spend an average of $2,700 on baby gear and basics like diapers and formula in the first year! But there are some easy common sense tricks to saving money and staying on budget with a new baby.
Budgeting for a baby
According to a USDA report, the average middle-income family spends between $12,000 and $14,000 on child-related expenses each year. For newborns, the cost is higher, where some studies show numbers ranging from $20,000 to $50,000 for the child's first year of life, depending on location and the household income.
Feeding
Adding a child represents a major financial stress: The cost of raising a child today is $233,610 – excluding the cost of college – for a middle-income family, according to the U.S. Department of Agriculture.
The range for an uncomplicated vaginal delivery is between $5,000 and $11,000. If you require a Cesarean section, the range increases to between $7,500 and $14,500.
A cloth diaper service will cost you around $70 per month and doing the dirty work yourself at home with cloth diapers will cost you anywhere from $250 and up to get the materials needed upfront. And don't forget an average of $20/month for wipes!
If you want to figure out the cost of baby formula per month, simply take the price of baby formula you calculated for a year and divide by 12. Based on the above calculations, your monthly cost is going to range from about $68 to about $243.
A study published earlier this year in the journal Health Affairs found that for women with employer-based insurance, the average out-of-pocket cost of a vaginal birth increased from $2,910 in 2008 to $4,314 in 2015, with the cost of a C-section going from $3,364 to $5,161 during that same time period.
A normal pregnancy typically costs between $30,000 and $50,000 without insurance, and averages $4,500 with coverage. Many costs, such as tests that moms who are at-risk or over age 35 might opt for, aren't totally covered by insurance. Plan to have at least $20,000 in the bank.
All major medical/ACA health plans cover pregnancy and childbirth. Under the Affordable Care Act, pregnancy and maternity care are one of the ten essential health benefits that must be covered by health insurance plans offered to individuals, families, and small groups.
You can save half a million dollars if you don't have kids.
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