Most people, especially when planning for their first baby, tend to ask around for advice, and any information they can get. Suggestions vary from the scientific “Make sure and take folic acid so your baby doesn’t suffer from neural-tube defects!” to the purely anecdotal “Because it’s your first baby, delivery will take really long!” and ridiculous “Don’t eat anything spicy or the baby’s skin will burn.”
Many people are not warned, however, of the financial impact of having a baby. As a result, parents tend to be blind-sided. The immediate costs of a pregnancy and subsequent ‘this human is here and needs care for the next couple of decades’ phase are often greater than parents realise, leading to increased stress.
To help you understand these expenses, here is a rundown of some of the major child-related costs:
Prenatal Care and Services – this includes (private)doctor’s visits, vitamins, blood tests and ultrasounds. $7200 to $15,000.
Delivery – Should you deliver in a public hospital there will be no direct cost. Many, due to the personal attention they receive, opt for private nursing homes. At these, a delivery can cost between $15,000 and $60,000, depending on whether a C-section needs to be done or if any complications arise.
Diapers – Diapers and more diapers. Most first time parents don’t realise that a single pack of diapers can cost between $80 and $200 and packs don’t last as long as one would hope. In total, for the first year you can safely average around $4,000 for diapers alone.
Clothes – Many first time parents also don’t realise how quickly their baby will grow out of its clothes. A safe estimation for clothes in the first year would be $1000.
Food – Many moms opt to breast feed, at least for the first few months. At some point the baby will be weaned off however, and either formula or baby food will be used, along with bottles, breast pump and other equipment needed for feeding the baby. This can get as high as $1500 to $5000 a year in the first few years, depending on what you choose to feed baby.
Safety first - A crib and car seat are strongly advised purchases and can cost from $500 and up.
Daycare – If you aren’t fortunate enough to have family at home that can look after your child, a daycare then pre-school must be sought. These costs vary depending on several factors including the location of establishments and variety of services offered. While most are aware of the ‘premium’ institutions, there are just as many ‘regular’ schools with great service. Daycare can cost between $600 and $4,000+ a month.
A rough estimate based on the above costs, brings the cost of a baby in just the first year of its life to between $30,000 and $100,000! From there, the expenses only increase, to include expenses such as tuition, healthcare and toys/entertainment You may be asking yourself, “How do people afford to have children?!”
Here are some tips:
Start ‘Baby’ and ‘Emergency’ accounts – From the moment you begin thinking about having a baby, start putting money aside for those definite expenses, but also for unexpected expenses that may arise. If you don’t already have one, your ‘emergency’ fund should be roughly equal to 3 to 6 months’ salary. Putting these into new accounts will help reduce the ability to spend the money on other expenses.
Budget – When you start budgeting, you almost immediately begin to plan smarter and more strategically. You can determine what services and items you need to pay for and those for which you can find free/cheaper alternatives.
Don’t buy everything – Your prenatal needs (check-ups, vitamins etc.) are offered free, from community clinics. Family or friends may have barely used car seats, strollers or even clothes. You can puree fruits and vegetable to make your own baby food.
Consider what is appropriate – While that deluxe car seat may sound appealing, will it fit in your car? Will you be able to manage that stroller yourself? We want the best for our children, but often the best may mean the most appropriate, not the most features.
Daycare Planning – Many daycares and pre-schools have waiting lists. Don’t put enquiring about these off, otherwise you may not get your desired school.
Network – You aren’t alone in this. There are several social and social media groups dedicated to first time parents that offer advice and support. Ask around and you’ll soon find one that’s a good fit for you.