Babies are so little—and yet they seem to come with such an enormous price tag (good thing they’re cute). According to a USDA report, the average middle-income family spends between $12,000 and $14,000 on child-related expenses each year.1For 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.2 Beyond the general items, like a stroller, crib, or car seat, here are some estimates on what you can expect to shell out in Year One.
Month 0.
Some significant purchases are required in advance of your baby’s birth. There’s no established list of necessary items, but you’ll probably invest in a bassinet, bottles, clothes, and a carrier to have at the ready when your child arrives. Costs can span a wide range, but budget for $1,000 minimum to cover what you’ll need at the start.
Estimated monthly amount: $1,000
Month 1.
The first month of your baby’s life may be the priciest because it includes maternity care, the cost of delivery, postnatal care, and a hospital stay. The numbers vary wildly depending on where you live, what kind of birth you have, and your insurance policy—so while the average cost may be over $10,000, it depends on so many factors.3 Research shows that birthing costs can exceed $27,000 in some states, like Alaska, but the amount could also be lower than average if you’re lucky.4
Estimated monthly amount: $10,000
Month 2 and 3.
Figuring out a sleep routine is the biggest challenge here. The good news is that babies usually don’t require much beyond breastmilk or formula and diapers at this point. If you’re breastfeeding, your costs will be lower (aside from the one-time expense of a pump, which costs anywhere from $40 to $185); while powdered formula will run you between $70 and $150 per month. Add about $60 for bottles and $75 for the monthly diapers and wipes you’ll go through. There are vaccinations your baby should get and a couple visits to the doctor during these months that should be budgeted for as well. It’s also time to start assessing your future financial goals.
Estimated monthly amount: $300
Month 4.
If you return to work after the baby is born, childcare could take up the lion’s share of your budget starting this month. Research by Care.com puts the national average cost of “in-center” childcare at almost $10,000 a year, which is around $830 a month.5 These costs vary among states and each family’s arrangement with who they choose as a provider, but a budget should be in place if you need to leave the child for work.
Estimated monthly amount: $1,000
Month 5.
Sometime around the five-month mark, the baby reaches a milestone in development and begins eating solid foods. Parents often start with purees, which you can easily make yourself. Compared to the cost of food for older kids, babies still get the bulk of their calories from milk or formula. But plan on spending roughly $50 a month on their applesauce, oatmeal, and avocados.
Estimated monthly amount: $1,050
Month 6.
Your growing baby is fitting into new clothes on a regular basis now. Baby clothes are the most common gift that new parents receive, but the average cost is around $50 a month for the first year. This is one category where hand-me-downs can be a major money-saver.
Estimated monthly amount: $1,100
Month 7, 8, and 9.
Babies typically begin crawling around this age, so if you haven’t already, now’s the time to put up safety gates, install door locks and knob covers, and outlet plugs. Baby-proofing can cost anywhere from $100 to $1,000, depending on the size and layout of your home.
Estimated monthly amount: $1,200
Month 10 and 11.
When you’re ready to start leaving your child, get an idea of what costs will be involved for an evening out. The average babysitting rate in 2016 was about $14 per hour.6 If you don’t have a friend or family member to watch your child, build some childcare expenses into your budget.
Estimated monthly amount: $1,250
Month 12.
Congratulations, you made it through your first year of parenting! By this point, you should have an idea of what’s needed in your monthly baby budget, so hopefully there won’t be any surprise expenses. As you prepare for the second year, start looking at ways you can save on childcare and new items you’ll need. And plan for an additional $50 this month to treat yourself to a celebration.
Estimated monthly amount: $1,300
There’s no set amount for how much you’ll spend on your child in the first year—especially with variables around insurance coverage and childcare needs. Where you live influences your expenses, too, but you should expect to spend somewhere in the range of at least $20,000-$25,000 in year one.
Learn more about how to manage your child’s expenses by contacting New York Life Partner Danielle Goslin at 956-412-4949 or dmgoslin@ft.newyorklife.com.
1 https://www.usda.gov/media/press-releases/2017/01/09/families-projected-spend-average-233610-raising-child-born-201
2 https://www.nerdwallet.com/blog/insurance/cost-of-raising-baby/
3 https://www.fatherly.com/love-money/finances/the-real-cost-of-giving-birth-in-the-united-states/
4 https://www.economist.com/graphic-detail/2018/04/23/a-typical-american-birth-costs-as-much-as-delivering-a-royal-baby
5 https://www.care.com/care-inde
6 https://www.care.com/c/stories/10254/how-much-does-a-babysitter-cost-babysitting-guide/
