Budgeting for a Baby
You’re ready to take the next step in life, but it comes with high price tags. Budgeting for a baby can be stressful and overwhelming, but it doesn’t have to be. In today’s blog, we’ll go over how you can budget for a baby and step into your next chapter with confidence.
Different Types of Costs
There are several types of costs you’ll incur for your first baby.
One-Time Costs:
For your first baby, you’ll need to buy all the necessities that you don’t already own. These can be a crib, stroller, and car seat.
You’ll also want to take into consideration the medical costs that come with giving birth. You’ll receive medical bills after having your baby, and these costs will vary. Factors influencing the cost of your birth are:
- The type of birth you have
- Where you give birth (hospital, birth center, at home)
- Where you live
- What your insurance covers
Recurring Costs:
You’ll have to frequently buy items like diapers, wipes, formula, and baby food. If you choose to take your baby to daycare or have a nanny, you’ll need to add in those costs as well.
Occasional Costs:
Occasional costs are things that you don’t need to purchase frequently but that you will need to account for. These can be things such as toys, clothing, haircuts, and doctors’ visits.
Priciest Items to Budget for
You’ll need to buy many items before you have a baby and many while you have a baby. All of these come at different prices, but there are a few that will take a bigger hit to your savings.
- Strollers: While you can purchase a cheap stroller, most new parents decide to purchase an expensive stroller with many features, and one that they plan on using for their future children as well. Don’t be surprised if you see strollers getting close to $1,000, but you can expect to spend several hundred dollars on one.
- Diapers: If you plan to use disposable diapers, you can expect them to cost over $1,000 each year. Unfortunately, the cost of diapers is only rising each year and $1,000 is on the lower end of the average annual cost.
- Clothing: Babies grow significantly during their first year of life. You’ll most likely want newborn, 0-3 months, 3-6 months, 6-9 months, and 12 months sizes. However, a lot of babies completely skip the newborn sizes or grow out of them quickly. Clothing is a common baby shower gift, so you could save a lot of money on clothing if you have a baby shower. It’s also important to remember that babies go through multiple outfits each day so you should plan on having a few outfits per day.
- Doctor visits: Aside from the cost of the actual birth, you’ll most likely have plenty of doctor’s visits to pay for. You may have several visits to your baby’s physician during the first year of their life. These visits are usually used for vaccinations and check-ups to ensure they are developing well. You’ll also see an increase in your insurance plan when you add your baby to it.
- Childcare: No matter what type of childcare you plan on having, you’ll want to budget for it. Typically, childcare is more expensive at a childcare center. Hiring a nanny who will come to your home is usually more cost effective but can require more work on your end. For an infant in a childcare center in Wisconsin, you could see your annual cost being anywhere from $13,500 to $17,000.
Saving for Parental Leave
There are plenty of things to consider when it comes to parental leave. We’ve put together a separate blog that goes over everything you’ll need to plan for parental leave. Read our parental leave blog here.