The High Cost of Bringing Up Baby
MADELEINE BRAND, host:
From NPR News, it's DAY TO DAY.
A new baby brings a lot of joy into your life, but you're going to have to pay for that joy. Having children is expensive. The U.S. Department of Agriculture estimates it costs the average middle class family, $184,000 to raise a baby from birth to age 17, and that's before they go to college.
The first year of a baby's life can be quite costly. And here with some financial tips for surviving new parenthood is Michelle Singletary, she is DAY TO DAY's regular guest for conversations about personal finance. Hi Michelle.
Ms. MICHELLE SINGLETARY (Personal Finance Contributor): Hi.
BRAND: Well that first year, how much does it cost to raise a baby?
Ms. SINGLETARY: Well the figures are sort of all over the place. But, you can expect to spend about $7,300 on average that first year.
BRAND: $7,300? They don't really eat anything, what is that money going for?
Ms. SINGLETARY: Well there's formula, there's diapers. If you have to put the child in daycare, there's daycare cost. And then sometimes first time parents go crazy and buy all the things they think a little baby needs, and all the baby is going to end up doing is crawling into a pot.
Ms. SINGLETARY: So…
BRAND: Yes that Bugaboo stroller, hmm.
Ms.SINGLETARY: Oh my goodness, I made that mistake when I had my first one. Buying all of these sort of developmental toys, and the kid just wanted to play with the pot and pans.
BRAND: Of course. And what is the largest baby expense parents forget to plan for?
Ms. SINGLETARY: I think it's daycare. Depending on your area, you can expect to pay as much as $280 a week.
BRAND: And that's for daycare, not having a nanny or babysitter come to your home?
Ms. SINGLETARY: That's right, that's to place a newborn in a daycare type facility.
BRAND: Okay, so what can couples do, to prepare financially for this big expense?
Ms. SINGLETARY: Well the moment you start to think that you're going to have a baby, is the moment you should start to save for that baby. You want to, for example, look at your health insurance plan to see what kind of prenatal care they take care of - make sure it's a really good policy.
In fact, you want to start saving for their college fund, right there, even before they come. You want to start putting money away for daycare, and diapers, and all the other things it's going to take you. The sooner you start saving, the better off you'll be once that little bundle of joy finally gets here.
BRAND: Now what about getting a lot of these big ticket items paid for? Have a baby shower, is that what you should do?
Ms. SINGLETARY: Yeah, right.
BRAND: I mean not to be craft about it. But…
Ms. SINGLETARY: Hit up your relatives to pay for your baby.
BRAND: Well people like to shop for baby things, and you know.
Ms. SINGLETARY: Yes, yes, yes…
BRAND: How many onesies does a baby really need, versus a bigger ticket item?
Ms. SINGLETARY: This is true. I mean, you know, the thing now is to have a baby shower and to register at a store to get some of the things. But sure to get - put on that list some of the basic things. You might also want to put on a stroller, or some of the big tickets items - with the idea that maybe people can group together and buy some of the big ticket items.
But just be careful about that, because I think lots of people are feeling as if you're using these occasions to hit them up for gifts, or to help you fund your baby. And you don't want to come off doing that.
BRAND: Right. (Laughs).
Ms. SINGLETARY (Laughs).
Ms. SINGLETARY: Well, yes. But just be practical about it, you're going to need lots of diapers and wipes, and all those kinds of things down the road that become expensive on a month-to-month basis. So, don't worry so much about the little fancy toys, but concentrate if you're going to do a list at the store, on gifts that you're going to need, you know week-to-week, month-to-month.
BRAND: Michelle Singletary joins us regularly for discussions about personal finance, her latest book is Your Money And Your Man, How You and Prince Charming Can Spend Well and Live Rich. Thanks Michelle.
Ms. SINGLETARY: You're welcome.
BRAND: Stay with us, DAY TO DAY returns in a moment.
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