Yesterday, our little man turned 1. It’s hard to believe our baby is already one years old!
As you can see he didn’t enjoy his cake.
I’ve been wanting to write about the cost of having a baby but didn’t want to publish anything until a full year had passed. I’ve also had a lot of people ask me to do a cost analysis of having a baby.
We’re at the age now that friends and family are popping out babies left and right and we can’t keep track of them anymore.
New parents always want to know how much it costs to have a baby in the first year. Obviously, it depends on each family’s circumstances but it can be terrifying having no idea how much a little one is going to cost that could potentially flip your finances upside down.
Today, I’m sharing what it cost for us to raise a child in the first year of introducing him into this world.
The Cost of a Baby the First Year
According to a 2010 USDA report, the average middle-income family will spend roughly $12,000 on child-related expenses in their baby’s first year of life.
We kept track of our expenses for the first year and categorized all those that related to our son.
We don’t have a problem sharing with you what we spent on a child. Honestly, we thought that we had spent way more but were surprised to find out that it didn’t cost as much as we thought.
In fact, the total net out of pocket cost may surprise you as it did us!
We Didn’t Just Buy Everything
It’s easy to think as a new parent that you have to buy everything for your new baby. But, many things are honestly a waste of money.
We’re generally pretty frugal and try not to buy things we don’t need. Our son has everything he needed to live a healthy and happy life in his first year. We didn’t just buy things because other people told us we “needed” them.
Some purchases we thought were a must-have, but some of those “must-haves” we didn’t use or only used for a little bit and then forgot about them. So we could have saved even more money when it comes down to it.
We’ve Been Told Each Year Gets More Expensive
Most of the food costs have been in the past few months. My wife nearly made it a year nursing and we didn’t start buying formula until about 9 months.
But now my son is eating real people food and he eats like a tank. There are some days that he eats more than I do and he’s one.
That’s no joke!
Our total costs including Amazon, supplies, clothing, formula, medicine, food, doctors, health insurance, and more.
Here’s what we spent in the first year of having a baby:
|Car Seat & Stroller||$324.81|
|Liberty Healthshare (Monthly Premiums)||$1,320|
|Co-insurance for Baby Delivery||$2,107|
|Co-insurance for Kenzie’s Doctor||$700|
|Liberty Healthshare Reimbursement||($3,215)|
|2018 Child Tax Credit||($2,000)|
|Total Cost of Baby First Year||$3,289.05|
Looking at our expenses, we were under what we predicted a baby was going to cost.
Factoring in the child tax credit (which doubled in 2018 from $1,000 per child to $2,000), it made it easier to afford a baby.
We spent more money than we would have if we didn’t have a child, no doubt, but it felt doable for us and it was worth every penny.
We were blessed to have a healthy kid who has had no health problems. My heart goes out to all parents that their baby had health complications. Not only can this be extremely expensive, but it’s also hard on the family.
We also saved money because we have great friends and family who helped us out with most of the upfront costs with a baby shower. We really didn’t need to buy clothes or toys in the first year.
We’re also blessed to have amazing grandparents that helped cover the cost of certain items. If it wasn’t for the grandparents, friends, and family we could’ve easily spent thousands more.
How to Save Costs in Your Baby’s First Year
Don’t let people convince you that you can’t afford to ever have kids.
If you are frugal and are willing to do what it takes to make things work, then you can easily come in under $5,000 for the first year, even with formula.
Having a newborn doesn’t have to become a financial crisis. If you get a realistic grip on the expenses you’re likely to face, do some planning, and learn the art of the baby deal, you should be able to save a bunch.
I was tired of how expensive health insurance was getting so we looked into alternatives. We decided to sign up for a health share ministry in January 2018 to lower the costs of premiums and insurance.
A health share ministry is different than health insurance.
How it works is, a group of people pay a monthly premium, pool their money, and pay each other’s health bills. Everyone covers the costs of healthcare of each member.
When we have to pay for a doctor’s visit or a hospital stay, we pay out-of-pocket (at a discounted rate) and then submit our receipt to Liberty Healthshare and they will reimburse us for the cost.
It saved us a lot of money paying $119 per month for my son. The only problem is at times it can take months to get reimbursed and there are some other drawbacks. I’m not saying you have to switch, especially if you’re employer helps you out, but it’s made sense for my family.
Get Your Finances In Order
We started preparing way in advance. Before we knew we were going to have a kid, my wife knew she wanted to work from home. So she decided to start her own business a year before she got pregnant.
Because she works from home we don’t have transportation costs or daycare costs.
A few other things you may consider before you have a baby is paying down credit card debt, refinancing your home if mortgage rates are low, save extra cash by working a part-time job and saving for expenses or your child’s education.
Look at Your Benefits
Before you have a baby, look at the options your employer has to offer you. Sometimes your employer may offer maternity leave, discount daycare costs, healthcare coverage, etc.
Don’t Just Buy Everything
Like I mentioned at the beginning of this article, you don’t have to buy everything to feel like you’re a good parent. Distinguish between needs and wants and consider getting used items and also selling those items that you don’t need.
You can access a Cost of Raising a Child calculator, which will help you look at spending patterns for families similar to yours.
There’s no doubt that when a baby is born, your life will change forever, and that includes your finances. But with a little planning and a couple of strategic decisions, you can make it work — and it will all be worth it!
I don’t expect the first year of your baby’s life to be similar to mine. But if you’re expecting soon and wondering how much it will cost for a baby the first year, hopefully, I’ve given you some things to think about.