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.
Ongoing Expenses
Clothing: The average cost for baby clothes is about $60/month for the first year, but again this varies and is highly correlated with income. Lower-income families make do with less than half that amount while you probably already know some parents who spend $60 on a single outfit.
But in the U.S., the average new mother with insurance will pay more than $4,500 for her labor and delivery, a new study in Health Affairs has found.
According to a 2015 report by USDA, middle-income families were likely to spend $233,610 to raise a child from infancy to age 17. Low-income families would spend $175,000, while those with much higher incomes would spend $372,000 (1).
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.
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 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.
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.
Here are 9 personal finance tips, in rough chronological order, to help ensure your baby's bright future.
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.
6. The 10K Mark. Before the baby arrives, save at least $10,000 for baby-related expenses during the first year. It sounds like a lot but can make it easier to absorb all those extra costs.
But the dilemma over the best age to start a family has finally been solved: women should aim for 34. The biological clock may be ticking for thousands of women. But the dilemma over the best age to start a family has finally been solved: women should aim for 34.
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