How Much Does It Cost to Raise a Child? Much More Than You Think…
Are you and your partner ready to have a baby? A cute, angelic baby who will look like both of you, without either of your hated features?
Congratulations, it's a big step in a relationship. It's also a big step for your wallet. The cost to raise a child is more than it's ever been - while salaries and minimum wage hasn't caught up.
So, how much money could you spend? A cool couple of hundred thousand dollars. The current data says around $233,000 - but that's an estimation.
If your child has health issues, needs tutoring, has a complicated birth - it can all go up. And that's not even counting private schooling if that's something you want.
Take a deep breath and get out your calculator - this is going to be a wild ride.
Breaking Down the Costs: Pre-Birth
Let's say you didn't use this agency for a surrogate to carry your child. That means you're on the hook for prenatal care and the monthly visits that come with it.
Plus, there's the vitamins and the maternity clothing. Let's say your copays, your vitamins, and your clothing cost you around $1000.
That's before the baby's even born. Then, you buy diapers, a crib, clothing, the new swinging chair, bottles and everything else a baby needs. We'll call that $1500. If you opt for a nice crib or the Mamaroo, it's easily $2000.
Your sweet baby has already cost you $3000 and they're not even out of the birth canal yet.
Add on Costs:
- Fertility treatments - $7,000
- Crazy food cravings over 9 months - $200
- Baby video monitor system - $150
Costs: The Birth
Okay, now you're ready to meet your small bundle of joy. You've chosen to go the safe hospital route. You have health insurance, but the birth will not be free (at least in America).
You get in and they do your bloodwork, hook you up to machines, check your dilation, and call in the doctor. Then you have (or don't) an epidural and start to push.
Once the baby's born, there are post-birth tests they need to run and sometimes surgery to stitch you up.
The average US hospital delivery costs $3,500. That's according to the Agency for Healthcare Research and Quality Healthcare and Cost Utilization project.
If we carry over our last numbers, sans any add-on costs, your day old baby cost $5,000.
Birth Plan Cost Adjustments (total cost)
- Prenatal care - $8,000
- Cesarean section - $4,500
- Diabetes in mother - 55% increase
Babies First Years
Your running total is at $5,000 if nothing goes wrong with the birth and there's no aftercare needed. So you take your baby home and you love them, you cuddle and coddle them, and you would pay triple the cost if you ever needed to again.
We're happy you're pleased with your child and the costs aren't over. From there, you'll need to buy diapers every week, supplement with formula if need be, buy wipes, creams, and baby food.
That's easy $50 a week, depending on the type of diapers you choose. If you go organic, that's more.
Babies get checkups about every month for the first year, so you'll pay 12x your copay. If your copay is $50, that's $600 your first year.
Six hundred dollars plus the fifty per week for diapers, wipes, and formula comes out to $3,200 for that first year.
And that's if you stay at home or have free childcare. We'll look at childcare costs next.
Before we move on, let's update our total for your cherub. You've got the 5k from birth and pregnancy, plus the 3200 from the first year.
That's $8,000, in 21 months (assuming a normal 9-month pregnancy) and not calculating in childcare.
Before Kindergarten: Childcare and Daycare Costs
As your child gets older, you're going to have the choice to go back to work. Which means you'll have to put your child in some sort of care.
If you have the budget for it, maybe that means a nanny or an au pair. That ultra privatized care is the most expensive.
If you employ a nanny full time, you can expect to pay around $600 a week. That's up from $500 a week, just three years ago.
If that's out of the budget, you can employ an au pair. An au pair is a live-in babysitter that hails from overseas. Since you're paying their living expenses, you pay them less out of pocket.
So, it's cheaper than a nanny, but not that much. The weekly cost of having an Au Pair is around $400 a week.
The next most affordable option, if you need something full time, is taking your child to commercial daycare. There, you can expect to pay around $215 a week.
It's much less than the nanny or Au Pair, but you have to deal with pick up/drop off - as well as the germs from other kids.
Your last choice is an in-home family childcare. This is when someone decides they can watch (usually up to 8) children in their home. That will cost you around $200 a week.
And this is all for one child. If you have multiples, the price goes up for each one.
Your location has a lot to do with childcare costs. If you live in New York City, for example - a non-crowded daycare may be harder to find.
According to the Care.com Cost of Care survey - these are the most affordable states for childcare.
- New Jersey
- New Hampshire
- North Dakota
If you're lucky enough to live in an affordable state, great. If you're not so lucky but it's not one of the five below, oh well.
The worst states for childcare costs are
- New Mexico
These lists were made by calculating the cost of childcare and comparing it to the median family income. Hence, it makes sense that poorer states pay more for childcare.
What does that mean for families? Well for 33% of families, it means they spend 20% of their annual income on childcare.
To break it down further, 71% of families pay 10% their annual income - at least.
That's a lot of money. If you only have one child and your childcare costs are around average, that's $10,550 a year in caregiver costs alone.
That's not calculating in their food, clothes, or medical expenses. Or the vaccines that most childcare centers require for entry.
Before we lose track, let's say you've put your child in infant commercial childcare full time. That's the $10,550 we noted above. Then you add in the costs for the first year ($3,200) and the birth ($5,000).
Now you're at $18,750 for the first year - give or take. You would think that the first year is the most expensive, because of the birth and the pregnancy.
And you'd be right if you use our calculation - but not by much. The average yearly cost of having a child is $14,000 if you don't opt for many luxuries (like private school or nannies).
And that's not calculating anything for you! To put things in perspective, the average salary is $59,055/year. That needs to sustain you, your partner, and your child.
The Cost of Education
We forgot to tell you, that $233,000 over 18 years of raising a child doesn't include college. That's right- if you want to pay for your child's college, you need to factor in at least another $9,970 per college year.
And more kids are needing a fifth year to complete their credits than ever.
Can You Afford to Raise a Child?
The point of this article wasn't to scare you. If you want a family we want you to have one, and we wish you happiness.
But, the costs of raising a child aren't something you can turn a blind eye to. They need things all the time, like care, food, diapers, and doctor visits.
Even if you sacrifice some luxuries, $14,000 a year is still a fortune to most American families.
Before you or your partner goes off birth control, sit down and figure out how you can afford to raise a child. You can engage a financial planner, for a fee, if that level of organization is worth the cost to you.
As long as both of you are still young, then take another year to save before you start trying. It's better to have more in your bank account than you can handle than more in the bassinet.
Want to learn how to do Forex trading on the side, so you can earn more for diapers and the like? Check out our starter guide to Forex Trading Like a Boss.