Expense Of Raising A Child

A question Shawna and I have gotten while doing financial coaching is “how much should be factored into the budget to add the first child to the family?”  That is a great question to ask.  I’m glad some people are planning for that before the time comes because Shawna and I did not and before we knew it, SURPRISE! – Our first two babies showed up 13 months apart.  Now we have an almost 9 yr old, almost 8 yr old, and a 3 yr old.  So I can answer this question from our own experience so far and I’ll keep it about newborns in general since there is a whole lot more to cover as the kids get older.


The first thing that came to my mind when we found out we were having our first baby is “we’re gonna have to feed him.”  The problem is I had no idea how much this was going to add to the grocery category (the grocery category in our budget includes all the consumables we’d buy at Wal-Mart).  Babies might not eat much but they poop a lot, and hopefully they’re doing that in diapers.  Unfortunately the diapers cost money, along with the wipes, ointments, & baby wash to clean and care for their dirty butts.

There are also countless other “grocery” items everyone is already using that increases in use for every addition to the family.  Just to name a few, it is items such as trash bags (for disposing of diapers), household cleaners (for cleaning up baby messes), laundry detergent (holy cow the laundry they mess up), and enough over the counter drugs to start a mini-pharmacy out of your house.

The point is they might be small but they cost as much to the grocery category as a grown up.  I tell couples to take the amount “they’re already spending on groceries, divide it by the two of them, and multiply that number by three for the total cost of groceries after the first baby is born.  The average household spends $125 per person per month so that would be $375 per month for a couple starting out with their first baby.


Oh the days when I worked for a big company that had great insurance benefits…  Now we’re completely responsible for our own health insurance and it is EXPENSIVE.  To be on the safe side I tell young couples to factor an additional $100 per month just in health insurance.

Then there’s the doctors visits…  We are fairly healthy people who don’t have to go to the doctor much, but newborns go all the time.  Then there is the chance your child might be born with a condition requiring ongoing medical treatment.  But we’re hoping for the best.  So for planning purposes I tell people to add another $100 per month to their budget for medical care.

Baby’s Future

If you’re planning well for a baby you should go ahead and plan it right – include savings for the baby’s future in the plan.  One day they will want a car, and those aren’t cheap.  Hopefully one day they will go to college, and that isn’t cheap.  And if you have girls they get married and typically the brides parents pay, and that is definitely not cheap.  I have two girls.  Jesus Take The Whee-eeel.

My friend Joe says it this way, “When you find out you’re pregnant that is at least an 18 year notice that college expense is coming” (or wedding, car, house – whatever they set out to do that you want to help them with).  The amount to save for all of that is up to preference and the hopes and dreams you have for being able to provide a great future for your kids.

We’re already up to $325 added to the budget from the $125 groceries, $100 insurance, and $100 medical care.  So if we add $175 to the savings that makes it $500 per month that should be added to the budget.  I would call that a good starting point.  As the child gets older and involved in activities and eating more and tearing stuff up etc etc etc the real costs have the potential to be a lot more.

Shawna and I are done having kids, but if we were planning to have one right now I would want to have room for $1000 per month in my budget to go toward the new baby.  That is just me though because I personally like to be over-prepared for something that I’m planning for, and there are always things overlooked when a major change like having a baby is about to happen.

Notice I haven’t even mentioned clothes and toys, etc.  For most people a lot of that stuff is gifted to them by friends and relatives when the baby is young.  What other things would you add to the advice for people who are planning for their first baby?

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