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I'm not a parent (yet!), but the wife and I are seriously thinking about starting a family. We both really want kids, but I'm just worried about the financial strain a baby could have on us.

Am I right to worry about this? How much should I be budgeting per month for the essential baby items? Some things I have thought of, but have no idea of how much it will cost:

  • food
  • clothes
  • nappies
  • medicine (is there anything that's regularly needed?)
  • startup costs (cot, pram, etc)

Am I missing anything? How do I go about making a rough estimate of how much a baby will cost?

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8  
Having a big family helps. If somebody in the family, cousins etc, already had kids they usually have tons of stuff in cupboards they aren't using anymore. In many cases they are even happy to get rid of it, so check with them. And if you are the first to produce grandkids, the rest of the family may be inclined to produce gifts. ;-) Otherwise, as per TorbenGB. –  Lennart Regebro Jul 20 '11 at 4:52
    
I think you need ot be realistic. If you're starting up from scratch, it is expensive, make no mistake. Lennart is right, in that if you have a good support netowrk who already have kids, they will all pitch in. I think if you're not overly financially in a good position, you have to think very straight about what is important in the monthly basket. Not wanting to be the bearer of bad news, but you're washing will triple, as will heating bills, they will have growth spurts, nappies are not cheap...tbc –  Hairy Jul 20 '11 at 6:50
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Be realistic; do you need wipes when you can use cloth and water. Make all your own food, not only is it healthier, it is cheaper than bottled food. We steamed and blended all our fruit and veggies for the first year, and put them in ice cube trays (perfect size). Look around on ebay, freebay (and others) for clothes and other goods. Whatever happens, you'll find you will be grand, you will do less things on your own and more as a fmaily, you'll stay home more and be happier. plan, make sure you include everything a stable relationship and love is the only thing you really need ;) –  Hairy Jul 20 '11 at 6:56
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Do not forget insurance. In the US, at least, every other cost "containment" pales in comparison to the cost of emergency medical care, should it be needed. Even normal care or chronic conditions will add up. –  Iterator Dec 17 '11 at 6:13
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Helpful: deliberatism.com/blog/the-minimal-baby Remember, billions of children have been raised for the equivalent of hundreds or low thousands of dollars. At the same time, you will feel an uncontrollable desire to spend money on your child (or on things that make you seem like a good parent to others)... I guess my answer is, as much or little as you want. –  zipquincy Apr 19 '12 at 18:27

8 Answers 8

up vote 20 down vote accepted

This is an understandable concern, and it's no secret that kids do cost money no matter how you put it. The easy answer is that lots of people have had lots of kids before us, and they managed to get by. It's a question of how you choose to spend your limited resources.

I think few are lucky enough to not have to think about what stuff costs. As for the rest of us, there is a whole spectrum of choices. On one end, if you only want the finest and best and newest, then you should expect to spend horrendous amounts. On the other end, if you're frugal and thrifty you can get by almost for free, but for that you'll have to accept used clothes, used toys, and so on. And you could find yourself anywhere in between.

Let me try to address each of your points.

Food: Exclusively breastfeeding is common for the first many months, so that's essentially free. If you choose not to, then you'll need formula, and that's unfortunately expensive. I hear there's a lot of "coupon" deals in the USA, less in other parts of the world (your user profile page doesn't state your location). But here in Austria, our local drugstore has rebate offerings quite frequently and that is when we go buy stuff in bulk. Saves a lot. As the child gets older, he can gradually eat more of your normal food, so you don't have to buy all those super-special baby foods that are available. Regular food can work just as well, if you're willing to think about what you're feeding the child. And small children really don't eat very much, so it's not like you need to consciously buy lots more food (though that will change when the child gets older).

Clothes: This is a good place to save money. First of all, newborns/infants/toddlers grow so quickly that they don't "wear out" any clothes. That means there's an ample supply of only slightly used baby clothing. Check in your local area or, public billboards, yard sales and flea markets. We've also made some good deals on eBay! Some clothes may not be perfect, or have a small stain. But there's no need to spend $$$ on Calvin Klein sweaters for a 5-month old kid. Unless you can afford it of course, then it's likely a nice luxury.

Nappies: I guess you refer to diapers. Disposable diapers are expensive to use, but their benefit is that they require less time (no washing and drying!). However, if you have more time than money then cloth diapers can be a good alternative. I've seen personal finance blogs calculate this, even using homemade detergent to further reduce cost. The verdict is that cloth diapers are cheaper to use but require a time investment instead.

Medicine: A healthy normal baby requires no medicine at all, except for immunizations if you choose to. Health insurance goes into this category as well, but often babies are insured through the mother's policy. Perhaps a nose spray against the common cold is needed now and then, but that shouldn't bust your budget.

Startup costs: As with clothes, it's amazing what you can find used. Beds, sheets, toys, anything and everything. Check flea markets in your community, and take a look in eBay (perhaps within driving distance?). Be sure to check that the items are safe to use and not broken or damaged. Some items might be no longer permitted (like older car seats), and that's something you can research in advance. In this category in particular, the rule of "less is more" applies: no child needs an entire room full of toys (many babies are even more interested in the "real stuff" like plastic bottles, old newspapers, boxes, etc. so they do not necessarily need much special "toys") and baby accessories. Just get the barest essentials and add on that as you go along. It's a lot easier to pick up more things than to get rid of things spent money on and realize you don't need after all.

Bottom line:
The baby will cost exactly as much as you care to spend. The actual figures vary greatly -- based on your region, income, standard of living, and more -- so it would not be meaningful to state any precise amounts.

PS: Oops, I just wanted to jot down a few thoughts, but now see what happened. Sorry! :-)

Update:
A Visual Guide to Saving Money with a Baby goes into detail about the economy of using cloth diapers and also mentions food, toys, and accessories. That blog is a gold-mine of money-saving tips, by the way. Highly recommended reading for anyone who thinks about personal finance.

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Thank you @BBM for the addition! –  Torben Gundtofte-Bruun Jul 20 '11 at 11:37
    
Good thorough answer! +1 –  MichaelF Jul 20 '11 at 11:49
    
Excellent answer, thank you! –  psynnott Jul 20 '11 at 17:55
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Good answer. Also on diapers: don't assume that more expensive=better. We've found that the ones that work best for us are the cheapest, and the price difference is huge. I probably live in a different country, but it's worth it to check this out. –  Francesco De Vittori May 4 '12 at 6:10

There's a couple things I want to touch on here, so it's sectioned up for quick browsing. Pick the parts you want to read, ignore the ones you don't. :-)

Day Care is Expensive and Working is Hard

If both you and your wife want to work after the baby is born, day care is expensive. It's really expensive if you have more than 1 child. If you have family that can watch the baby (even part time) or one of you can be a stay at home parent, then that's something you don't have to worry about. For others, it's a concern.

If both of you are working, keep in mind that there's lots of things that pop up that can require one or the other of you to miss work. Doctor's visits, sick kids, day-care centers/schools that are closed for occasions that don't coincide with holidays at work, school concerts, sick babysitters, etc.

This isn't meant to discourage you, but if both you and your wife are working, plan on a significant income reduction just from time off and day-care overhead while the baby is very young. If you have access to things like a Dependent Care FSA, or your employer has on-site daycare or some other luxury, take advantage.

You Don't Need Much

Aarthi's answer touched on this, but I'd like to make it explicit: There is an absolutely tremendous amount of crap on the market that you really don't need, and is marketed in a way that borders on preying on the fears and feelings of inadequacy of new parents. (Not that other product classes don't also have unnecessary/overpriced products, it's just that few have the psychological pull that an undercurrent of "if you really loved your baby you'd buy X".)

There's few things you absolutely need, and most of it available used at reasonable prices. Most everything else is a balance of utility vs. cost and what your financial situation looks like.

If you want long-range audio/video baby monitor with remote WiFi access and an iPhone app, the deluxe wipe warmer, or the convertible stroller/car seat combo that doubles as a floatation device in the event of a water landing, and you can comfortably afford it then by all means buy it if it makes you feel better. But don't feel like you're less of a parent (or not worthy to be one) because you can't afford (or don't want) expensive gadgets.

Check out the What to buy before baby is born? answers for an overview of the bare essentials, and the Hacks and gadgets for the soon-to-be dad answers for some ideas of neat toys to get if you've got some extra disposable income.

Don't Forget the Doctor

Depending on where you at, infants may be expected to have quite a few well-baby visits to the doctor in their first 2 years. This is after all the regular checkups that the mom-to-be will have while she's pregnant. While whatever insurance you have will often cover most, if not all, of the direct costs, keep in mind that you're liable for any co-pays that might be required. There's also the issue of any time off of work that you or your wife will miss for the various and sundry appointments.

Also, kids get sick. It happens. That means more doctor's appointments, possibly medicine, and possibly taking time off of work until they're well. Most day care centers aren't going to let you leave a sick child with them until they're non-contagious. Even if they do, all the other parents would be upset at the one who would send a sick kid to day-care when their kids came home sick.

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+1 for emphasizing how new parents are being preyed upon and guilted into buying stuff. It can be really hard to resist! Only in hindsight will parents realize that they really don't need much. –  Torben Gundtofte-Bruun Jul 21 '11 at 6:25
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Daycare is expensive, yes. But for the most part, it will be less expensive than what you will make working. But you should do the calculations on how much more you will earn after taxes and travel costs, and also remember that when taking the kids to a daycare with other kids, they will be sick a lot. –  Lennart Regebro Jul 22 '11 at 8:11

TorbenGB had a great response. I'd like to add that WhatToExpect.com has an article (and a whole section, even!) discussing this very topic. their first tip is probably most relevant to the discussion:

Never pay more than you have to. When stocking up for your baby, remember that some things are essential, but certain items might not be worth the cash. Before splurging on anything, canvas your mom friends and scour Web sites for reviews on products that you’re wondering if you really need. And don’t forget your local library — it’s more than just a source of books, CDs, and DVDs for your baby. Ask about free classes and story time for your tot’s age group. It’s a great way to find inexpensive activities for you and your baby (as well as a perfect chance for you to meet moms in the neighborhood).

Another way not to pay more than you have to? Use a Chase card with Blueprint, which can help you pay off your balance faster and save you money on interest.

As someone who saw more than a few college-years pregnancies, I'd like to echo the used-is-good mantra that seems to have developed. Used clothes, furniture, and using cloth diapers will save a lot in the long haul. My parents only used disposable diapers if they were going out with my brother or me, and they told me that it saved them hundreds of dollars - and this was in the early 90s! Goodwill, SalvationArmy, Once Upon a Child, and good old garage sales / flea markets are great places to get stuff. Definitely ask extended family if they have old children's clothes (my mother has every single item she bought for my brother and me stored in the attic) and church groups are always very generous with such things. If you're in a large metropolitan area, consider CraigsList as well.

Finally, if you have a friend who knits or crochets regularly, ask if s/he wouldn't mind making a baby blanket, socks, mittens, and/or a hat. These are a relatively non-time consuming projects that could yield a lifetime keepsakes.

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Parents.com also has information on saving money during the first couple of years. Babycenter.com has a list of top baby costs and how to cut them. (They, too have a section dedicated to family finances.) If you want a less American perspective, Babycentre.co.uk has tips and a section on family finances. –  Aarthi Jul 20 '11 at 14:02
    
Again, excellent answer with some great information links, thanks! –  psynnott Jul 20 '11 at 17:57

I won't say that having a baby isn't expensive, but you might end up cutting back on some things that you are spending on now.

Eating out My husband and I go out to eat a lot less. It is simply easier to fix something at home than to take baby out. His bedtime is around 7:00, so he gets cranky around dinner time. We do still go out some, but much less often. Now a date night might be ice cream after baby is asleep.

Alcohol Drinks are expensive, and for 9 months (plus breastfeeding time if going that route) there will be no money spent on alcohol. Well, at least, the mom will be saving on this, and some dads give it up to be nice.

Shopping trips Getting in and out of the store before the baby gets fussy becomes important. I think the less time I spend in the store, the less likely I am to buy things I don't need.

General entertainment Watching the baby becomes the entertainment for the evening, and I don't mean that in a bad way. Babies are wonderfully funny. Playing peek-a-boo is completely free and fun when your baby is laughing.

Budgeting If you're not already watching your finances carefully, having a little person completely dependant on you, will make you think twice about whether or not you really need something.

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I think this is an extremely valid point. Certainly for us the need / inclination / opportunity to go out went through the floor after W and lead to quite a saving. I'm much less likely to go out late now and would rather be back to see him even if I do. –  Dan Kelly Apr 17 '12 at 15:08

This will depend HUGELY on the country you live in. I've raised kids in Germany and the US: Germany gives you a lot of parental time off, federal subsidies (Kindergeld), mostly free health care, free schools, and easy (although not cheap) access to all things organic and environmentally friendly. Housing can be a bit of a problem since space comes at a hefty premium, especially in urban areas. College is essentially free (maybe 1000 Euro/year) and you can even get federal cost-of-living grants (BAfoeG).

In US there is no direct subsidy (other than tax exemptions), day care is expensive, public schools are free but of fairly varied quality. Shopping is great in the US and thrift stores and "freecycle" are excellent sources of good low-cost kids stuff. It's much more common to own your own house, which is great (and cost effective) with kids. In the US the big financial killer is college/university. It is insanely expensive. Average total cost (after financial aid) is around 20.000 US dollar per year for a public school and $35.000 US for a private school. Another potential financial pitfall in the US are health insurance. If you have good (= EXPENSIVE) health insurance with your employer, you should be all set. Having only mediocre or no insurance and a kid with a significant medical issue is a real problem.

Raising kids on Europe is much cheaper than in the US, but even in the US it's worth every penny!!

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Answer: No.

The average person cannot afford the costs (planned or otherwise) of rearing a child. Without going into all the grocery lists, it simply makes no economic sense. At all.

That being said, these same people don't have a baby because of the cost. People have babies because of the value.

I never imagined being able to afford the costs of my children, but I'd absolutely do it every time i had a chance because the personal value is just ridiculous.

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Of course this is very personal, but honestly I have to say I think we have spent less than $200 on our baby so far - he is six months old now. Here are the main things that save money:

  • breastfeeding: not only saves money but is an incredibly beautiful experience for mommy & baby
  • diaper-free method (elimination communication): We bought some cotton diapers to practice with, but now we need less than 1 diaper a day
  • Co-sleeping: It is wonderful to go to sleep with your baby next to you and it means you don't have to move to a bigger house/appartment - not yet anyway, gives you time to save up.
  • Buying used stuff/receiving from friends or family: Some might loathe the idea of having used stuff for their precious little one, but I love used stuff for many reasons. For me, there are some exceptions though, like cotton diapers, underwear, etc.

Hope this was helpful and I really hope you will not worry too much about the money, because there is nothing you can buy that will give you the amazing, wonderful, deeply fulfilling experience of caring for your own little one. Good luck and all the best!

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Just a random - if you do have a child and breast feed, you may need or want a breast pump at some point. If you do, don't waste your money with a non-'hospital grade pump, and instead get a Spectra S1/S2 or Medela Swing (or similar). Buy second hand and sterilise well if you want to save money, or if you need free, hand express. For supply issues, this is way more important than anything else, and in Australia you can be talking about $45/week to hire a decent one. We bought a $229-319 Spectra (S1 has a battery) and the Medela Harmony2 was returned - the Spectra was as good, and faster still. Cleared up mastitis and blocked ducts very well when in combination with baby.

Latching problems, sucking problems etc are all fairly common. Kids are awesome though. We adore our 6-week old, even if sleep deprivation is a bit horrific!

Also, remember that deciding you will try for children is no guarantee of being successful - it may take time and effort! I can only say that it's better to decide while your fertility as a couple is as close to its peak as possible, rather than gamble when you're in your later 30's or 40's.

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