How much does a baby cost? How to plan for the first year : Life Kit Having a baby is one of the biggest — and most expensive — life changes a person can experience. Farnoosh Torabi, editor-at-large at CNET Money, shares what you need to know about budgeting for a baby.

What you need to know about preparing financially for a baby

What you need to know about preparing financially for a baby

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A concept photo showing a table with diapers, breast pump and baby bottles. In the background, a new mother and a young baby can be seen.
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The U.S Department of Agriculture says families are projected to spend an average of $233,610 raising a child born in 2015. That's not cheap, and thanks to inflation you can add almost $51,000 more to that total.

Those financial figures are a lot, but the good news is you don't need to worry about having all that money upfront. There's a proverb: A journey of a thousand miles begins with a single step.

Parent and money expert, Farnoosh Torabi advises expectant parents (or those planning for the future) to focus on that first year. And while it is expensive, Torabi says one of the benefits of becoming a parent is that you instinctively start to prioritize and focus on what matters.

Start planning for the big things early.

Explore your current situation as early as possible, so you know what your options are and have an edge on making adjustments. Torabi suggests starting with one of the biggest costs: child care.

What you can expect to spend on child care depends on where you live —average costs vary widely based on location. Think through your ideal childcare scenario and what's available. Is daycare an option? Do you need to get on a waitlist? Do you have a friend or family member who could watch your baby? Or do you have the option to stay home, even if that means going from dual income to a single income?

Also, look into what your employer might offer in terms of paid leave. Will you qualify for time off through FMLA? Torabi says the earlier you examine this, the more room you have to make changes, for example finding a job that has benefits or pay that match your goals.

"We are very behind as a nation in terms of family leave policies," she says. And while changing jobs for lack of paid leave is not an option for everyone, Torabi says doing so can send a message: "The more that we, as workers, leave jobs because of this reason and make that the reason we leave, I think that's going to be very powerful."

Budget for essentials.

If you've never cared for an infant before, it's hard to know what you'll need that first year. Looking at a baby costs calculator like this one can help. That said, some costs are more negotiable than others. For instance, you can save money by borrowing or thrifting baby clothes and checking out books at the library. Other essentials will be a more regular part of your budget:

Food: This one is obvious, but babies need to eat. That could mean formula and bottles, and if you're nursing, that may mean a breast pump. Sometimes you can rent one from the hospital, and insurance companies are required to cover certain models of pumps. Torabi also suggests getting samples from the hospital when you can and signing up for mailing lists and samples of formulas if you're using that.

Diapers: Diapers are another recurring, necessary expense that can add up. One in three U.S. families struggles to afford diapers, according to the National Diaper Bank Network. Think about how you want to diaper your baby. Will you go cloth or disposable? If you need assistance, local diaper banks, mutual aid groups and places of worship can often help.

Health care: Hospital costs will depend on your health insurance and the services you (and baby) end up needing during your pregnancy and delivery. Make sure to bring your insurance information to your doctor's office and ask what's covered, or what might come up, so you can plan. That may also mean calling your insurance company yourself.

Think about your child's insurance coverage. Will they be added to yours? Your partners? Will they qualify for CHIP?

Parse the necessary from the unnecessary.

Don't get sucked into the mindset that just because you're having a baby means that you somehow now need to upgrade your entire life. Torabi suggests reducing stress and expenses whenever possible.

A few things you probably don't need to worry about:

Moving into a bigger home: Everyone likes having extra room, but babies are small, sleep a lot, and don't need a ton of space. Plus they won't be going to elementary school instantly, so you don't need to worry about your school district just yet. You can have a baby in a studio apartment.

Upgrading your whole wardrobe: Maternity clothes don't last that long — don't go wild. Wear what you can from your own (or your partner's) closet for as long as you can, and borrow or thrift the rest.

Having the latest model of everything: Babies need clothes, and sometimes they need accessories like strollers, cribs and high chairs, but you can get a good amount of these items gently used (or even brand new) and free! Facebook marketplace, neighborhood listserves, Buy Nothing groups and thrift stores can be good places to find baby gear.

Just make sure the gear you thrift hasn't been recalled. A quick internet search of the product make and model should be able to tell you. (Most experts don't recommend getting a car seat secondhand for safety reasons. If you need help affording one, this list can help.)

If you're lucky enough to have family, friends and coworkers who make up your community, lean into the excitement and let people provide for you. Baby showers can be a great way to gear up.

Look at your debt and savings goals

If you have a lot of debt, enlist an advocate to help you. Torabi recommends the National Foundation for Credit Counseling. It's a not-for-profit organization that provides free consultation and has a mission of helping people tackle their debt.

For those with a dual income, Torabi suggests practicing living on one income for a few months. It may sound unrealistic, but you may need to do it if someone loses a job, so give it a try, even just for a week. This is also a great way to do some lump sum savings to get to the finish line faster.

Giving your money meaning, when paying off debt or saving for a purpose, can help you meet your goals. Torabi says to let the goal of becoming a parent be like a carrot that keeps you moving forward.

Remember, this is an emotional experience.

People — well-meaning people — are going to have opinions on what you should or should not do, even items to buy or avoid as you plan. Just remember that you don't have to do any of the things that everyone says you need to do. Do you HAVE to take a babymoon or do expensive prenatal yoga or sign up for that monthly Montessori toy subscription? Nope.

YouTube is full of free prenatal yoga classes, and it turns out that babies like to play with household objects just as much as expensive toys.

A lot of decisions about money and parenting are emotionally charged. Take a beat before making an emotional decision. You don't need the most expensive stroller to be a good parent.


The audio portion of this episode was produced by 2021-2022 Kroc Fellow Michelle Aslam. We'd love to hear from you. Leave us a voicemail at 202-216-9823, or email us at LifeKit@npr.org.

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