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How much does a baby cost in the first year?

Father buckling baby boy (2-3 months) in car seat
Jessica Peterson/Getty Images/Tetra images RF

Having a baby can bring so much joy. But rising inflation may have you wondering, "How much does a baby cost in the first year?"

Baby expenses can vary greatly—by preferences, household income and, in some cases, insurance coverage. Here, we'll list estimates of common baby expenses to consider in the first year and how you can financially prepare for your bundle of joy.

One-time (or less frequent) baby expenses

One time and less frequent baby expenses can range from $6,000 to more than $8,000 from medical expenses and purchases for the baby's room, grooming and feeding equipment, travel gear, baby-proofing items, and toys. Here's how it breaks down:

Medical expenses

Medical expenses include prenatal and postnatal care. The costs depend on your insurance coverage but are also impacted by the type of delivery and the birthing parent's and baby's health.

Medical expenses: $4,500

  • Prenatal care
  • Labor and delivery
  • Postpartum care

Baby's room

When it comes to where your baby sleeps, you may want to start small and simple with a bassinet. Or maybe you want to go full out, purchasing a crib, dresser, rocking chair and other items. Luxury brands from boutiques will cost more than mass-market brands from larger retailers. Prioritize safety and functionality as you do your research. In general, baby purchases should be approved by the Juvenile Products Manufacturers Association.

Furnishing baby's room: $500-2,000

  • Bassinet
  • Crib, crib mattress, bedding
  • Dresser
  • Changing table
  • Rocking chair
  • Baby monitor

Grooming accessories

You may need some one-off expenses for keeping your baby clean. Many parents opt for an infant bath for easy bathing. Diaper pails hold soiled diapers, so the smell doesn't linger.

Grooming accessories: $100

  • Baby bath
  • Diaper pail
  • Bath towels

Feeding equipment

Whether you nurse or formula-feed your baby will largely determine your feeding costs. If nursing, having a pump and accessories will go a long way. Some nursing pumps are covered by insurance. As your baby grows, consider a highchair to keep them safe at the table.

Feeding equipment: $200-$650

  • Bottles, bottle cleaners
  • Nursing pump and accessories (nursing bra, nursing pillow)
  • Highchair

Travel gear

Car seats and strollers help keep you and your baby mobile. Some families also have baby carriers for crowded areas where a stroller is inconvenient. Again, prioritize safety, and it may also be worth spending a little more upfront on a car seat or stroller that grows with your baby.

Travel gear: $500-$800

  • Car seat
  • Stroller
  • Diaper bag and accessories
  • Baby carrier

Baby proofing items

By the time your baby is around 6 months old, you may be chasing them around the house. Making sure unsafe areas are blocked off, locked up and covered can bring peace of mind.

Baby proofing equipment: $50-$300

  • Gates, playpens
  • Cabinet locks, outlet covers, table corner covers

Toys

You'll want items to keep your baby engaged. Family and friends may also buy toys as gifts for your baby.

Baby entertainment: $100-$350

  • Swings, bouncers
  • Other toys estimated

Recurring baby expenses

Recurring baby expenses can range from $15,000 to more than $30,000 for your baby's first year. Here's how it breaks down.

Cleaning and grooming products

Keeping your baby clean requires lots of diapers, wipes, creams and lotions. You'll need baby clothes but not as many as you may think. You can keep it simple with inexpensive onesies, or choose to keep your little one fancier. Clothing is another category where family and friends often love to spend, hopefully giving your budget a little breathing room.

Cleaning and grooming: ~$200/month

  • Diapers, wipes
  • Creams and lotions
  • Clothing
  • Bathing supplies

Baby food and formula

Formula is a major baby expense if you go this route. If nursing, you'll need storage bags to store your milk. And as baby grows, they'll start to explore purees, like baby food, or fruits and vegetables that you can purchase or puree at home.

Feeding baby: $50-$200/month

  • Formula
  • Milk storage bags (if nursing)
  • Purees and soft snacks

Child care

If both parents work full time or you're a single parent, you may need full-time child care. Even if a parent stays home, you may want help every now and then. Factor a nanny or babysitter into your budget. Having family or friends take care of your baby can also alleviate these costs.

Child care: $1,000-$2,400/month

  • Full-time child care
  • Part-time child care

How to save for first-year baby expenses

Review your current financial picture

List your current monthly income and expenses. Take account of your total debt and savings. You can get started with this personal cash-flow worksheet. This activity will not only show where your money is currently being spent, but it will help identify any gaps in savings or overspending patterns. Use the time before your baby arrives to downgrade and minimize expenses as much as possible. If one parent is planning to stay home with the baby, try to decrease expenses to one paycheck as soon as you can.

Establish an emergency fund

Not only should you save for those less frequent baby expenses, but you'll also want to grow your emergency fund. In general, your household expenses increase with a baby. Build a greater cushion to be prepared for a financial setback like a job loss.

Additional considerations to prepare for baby's first year:

Family leave

The type of family leave available through your employer may determine how much time you take off from work once the baby arrives. Some companies offer six weeks of paid leave while others may offer 12 weeks.

At a minimum, all companies are required to offer up to 12 weeks of unpaid leave according to the Family and Medical Leave Act. Make sure you and your partner understand paid versus unpaid leave, so you can plan accordingly.

Family income

Will you continue to be a two-income household once the baby arrives? Or will you or your partner decide to stay home with the baby? Shifting from two incomes to one can be a drastic change you'll want to plan for well in advance.

Changes to health insurance

Once the baby arrives, you'll need to expand your health coverage. With the increase in spending, consider flexible spending accounts.

  • Health spending account (HSA): If you have a high-deductive health plan, you'll qualify for an HSA. An HSA allows you to save and pay for qualified medical expenses with pretax dollars. You own your HSA, so any money contributed to this account is yours no matter where you work.
  • Flexible spending account (FSA): Similar to an HSA, an FSA allows you to save for qualified expenses with pretax earnings. Unlike an HSA, you don't own your FSA; your employer does. If you change employers, you can lose whatever is left in your FSA.
  • Dependent care FSA: This FSA allows you to save and pay for qualified dependent care costs with pretax dollars. Similar to an FSA, your employer owns this account and leaving the company usually forfeits your remaining balance.

Tax implications

A new baby can impact your taxes in a couple of ways. The child tax credit and dependent care credits can lessen your tax burden. Talk to your tax professional to understand how having a baby will fully impact your tax obligations.

Establishing college savings

College savings plans, like a 529 plan*, allow you to save for qualified college expenses through an investment account that grows tax-free. The rules are pretty strict on how you can spend the money. If the expense doesn't qualify as a college expense, the withdrawal can be hit with a 10% penalty. For more flexibility, consider a Uniform Transfer to Minors Act custodial account. These investment accounts are taxable, but the money can be used however you choose.

Financially protecting your family after you have a baby

With an expanding family comes more to protect. Consider the following things to help ensure your family is financially protected down the road:

Life insurance.

Whether you currently have dependents, life insurance is incredibly useful for helping you reach your financial and life goals. It not only protects your family in the event of your death, but life insurance can also be used in ways while you're living. Start by going through these questions to determine if it's right for you and your family. Then, get a ballpark of your needs using a life insurance calculator.

Disability insurance.

An essential and valuable asset that people often overlook is their ability to earn an income. If you suddenly cannot work, how would you pay your bills? Consider disability insurance, even if you have a group policy through work which may only cover a portion of your salary. Start by using the disability insurance calculator to estimate your needs.

Establish key documents.

This includes creating or updating your will to include who you want to take care of your baby if you and your partner pass away and changing beneficiary designations. Also, consider completing a durable power of attorney that specifies who handles your finances should you become incapacitated. Get more detail on essential estate planning documents. Given the legal nature of estate planning tools, it is always beneficial to review estate planning with a legal professional.

So, how much does a baby cost in the first year?

In total, it can range from $20,000 to $40,000. Planning for these expenses will leave you well prepared when you decide to grow your family. But you don't have to prepare alone.

A Thrivent financial advisor can help you dive into your current finances and create a financial strategy that accounts for all of your baby's needs in the first year, and helps protect your family into the future.

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*Offered through a brokerage arrangement with Thrivent Investment Management Inc. 529 college savings plans are not guaranteed or insured by the FDIC and may lose value. Consider the investment objectives, risks, charges, and expenses associated before investing. Read the issuers official statement carefully for additional information before investing. Investigate possible state tax benefits that may be available based on the state sponsor of the plan, the residency of the account owner, and the account beneficiary. Consult with a tax professional to analyze all tax implications prior to investing.

Thrivent and its financial advisors and professionals do not provide legal, accounting or tax advice. Consult your attorney or tax professional.

4.8.22