Planning for a Baby on a Budget

Wouldn’t it be great if we could all do or buy whatever we wanted without worrying about the cost? That may work for the super rich, but if you are like most families trying to live within your means, you adhere to some sort of budget.

Sadly, for some families, the decision to have a baby can be hindered by the cost. According to the United States Department of Agriculture’s most recent annual report, a baby costs somewhere in the range of $234,900 dollars (without inflation) from birth to age 17. Which, if you divide that equally by 17 years, calculates that the cost of raising a child is roughly $13,817.65 dollars per year. Now we know this is not an exact number since the cost of raising a child can differ for many and most certainly gets more expensive as the child gets older. But the one thing all parents-to-be know is that having a baby costs money.

If you are planning for a baby on a budget, here are some things to think about:

• What is your Insurance plan’s out of pocket max? Once you have paid your deductible, your Insurance company should pay 80% (depending on your plan) of the remaining bills until you have reached your out of pocket max. Your out of pocket max is the maximum amount of money your Insurance plan requires you to pay per year for covered medical expenses. (Your deducible is included in that dollar amount.)

• What is your co-pay for pre-natal care visits? You will have between 10 to 15 visits or more during your pregnancy.

• What is your co-pay for Pediatrician visits? You will have to take baby to the doctor at least 6 times in the first year (or more depending on the health of your baby).

• How much will your Insurance plan be per month once you add baby to the plan? How much more is that than you were paying before?

• Do you plan to breastfeed or formula feed? Formula prices vary, but the average cost of formula feeding is $105 per month. If you plan to breastfeed, will you be pumping at work? Breast pumps range from $30 to $500 dollars.

• Will you use cloth or disposable diapers? According to National Geographic’s Green Guide, the average baby will need roughly 9,000 diapers in his or her lifetime. Disposable diapers cost an average of $72 a month. Add in some additional costs for wipes ($20 per month) and diaper rash creams, etc. If you cloth diaper, you will spend an average of $19 per month plus the cost of using more water to wash them.

• What kind of maternity clothing will you need? After the first few months of pregnancy, you will need to start wearing more comfortable clothing. Don’t forget that there are many great second hand maternity clothes out there!

• What are the basic items you will need before you bring baby home? Make a list of the things you don’t think you can live without, like a crib or co-sleeper, bottles, basic baby clothing items, blankets, a car seat and diapers!

• If you are working now, how long do you think you will stay home with the baby? Find out how long of a paid maternity leave your company will give you. If you want more time, you will need to calculate the cost of unpaid maternity leave.

• If you are thinking about staying home with baby until he or she starts school, you will need to calculate the cost of living on one income. If you will be returning to work, you will need to calculate the cost of daycare. If you are unsure, take the numbers for both these scenarios and see what the difference is. It may cost you less to stay home with baby. Or, to maintain the lifestyle you enjoy, it may cost less to put baby in daycare.

• Will you be opening a 529 fund to save for baby’s future college tuition? How much can you afford to contribute?

It takes a lot of planning to be financially responsible, but being prepared is worth the hard work. At first glance, planning for a baby can appear financially daunting, but don’t let that get in your way. If you have a plan in place before your baby arrives, you won’t have any financial surprises get in the way of enjoying your new baby. Having a baby is an exciting and joyful experience. And no one can put a price on that!