The Real Cost of Having a Baby
The following blog post is from the perspective of our Member Relations Officer Katie Templet. She has made sure to give you everything you need to know to prepare for the upcoming arrival of your baby.
A real life perspective on the costs of your baby’s first year:
From the moment you see the first ultrasound and know without a doubt that you are indeed expecting, there can be a whirlwind of emotions and thoughts. Am I prepared for this? Can I be adult enough to take care of a baby? How do you even take care of a baby? And if you’re like me, financial questions came next in the form of how much do I need to save? Surprisingly, I had a hard time finding this number, despite the wealth of information out there when it comes to personal finance. I think that is because when there are so many different factors at play, from health insurance to the options of feeding; this number is going to look different to every single person. However, I am here to still help you get as close as possibility to that number, along with tips and tricks I’ve learned along the way to help decrease those costs. There also were certain baby items that I found out about much later in my baby’s first year that I wish I would have invested in to save me time and grief.
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Health Care
This is going to be different for every person because not only is your care individualized, but so is your health care plan. I was extremely fortunate to have an employer who has selected a stellar insurance plan (shout to Meritus CU!). My expected natural delivery was estimated to be around $2400 ($200 more if I planned to have a C section) for my doctor and paid around $240 out of pocket. This is also something I did not know for my wellness check-ups; they do not operate like regular doctor visits. Instead of paying co-pays for each visit, you are paying a total lump sum of what the doctor is charging you for, which includes expected appointments and the delivery. Once the doctor’s office finds out how much you will owe, they then divide that number in smaller payments and installments to be paid at each doctor’s visit.
What about the rest? The rest of your bill will be charged from the hospital for medications, the hospital stay, and everything in between. In Lafayette, Louisiana, an average hospital bill for delivery and your stay will be around $20,000. It will be up to your insurance to know how much you will be responsible for. However, you don’t have to wait post-baby to know exactly how much you’ll be paying. Call your insurance provider now and ask the percent you will be expected to pay and what your specific out-of-pocket maximums will be.
Pro-tip: When you call your insurance company, find out if your baby will be covered for their first thirty days under the mom’s plan, even if the baby doesn’t end up being added to your policy. Long story short, my husband and I almost got slammed with an unnecessary $12,000 medical bill due to our daughter’s NICU stay (more on that later). My insurance provided more coverage but due to the cost of premiums, we were going to elect to use my husband’s insurance plan. However, my plan would still cover her even though she wouldn’t be covered by my insurance provider past her first thirty days. If you will be following a similar plan, call your insurance provider ASAP to add baby to your policy for the first 30 days so there will be no confusion about your medical bills.
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Expect the Unexpected
When I first began saving for the baby’s arrival, I was unsure how much to save. I decided to save an extra $4000-$6000 to pay for things needed prior to birth, medical bills, unpaid maternity and paternity leave, and anything needed right after. This ended up being a life saver for us. As almost all parents would say, you never expect your child needing to go to NICU. However, my daughter had an unexpected 4 day stay despite having a late arrival (41 weeks). This was an extra $20,000 hospital bill, that with insurance, resulted in an extra $1500 owed to the hospital.
Take-away: Save, save, save! Like we addressed in the insurance section, expenses will vary depending on your situation and it can be almost impossible to plan the future because we simply don’t know what’s to come. By having an extra cushion, you will not regret having the peace of mind when it’s time to pay your hospital bills.
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Baby Food and Diapers
To echo the previous sections, buying food and diapers is another subject that may surprise parents, that is, what is planned may not be the actual method that transpires. I’ve seen mothers plan to breastfeed then have to switch to formula, and vice versa. One of the major benefits of breastfeeding is, of course, it is free while formula can be quite costly. But if you choose to breastfeed, do keep in mind you may find yourself having to buy special lactation cookies or supplements to keep up with a supply. Due to our NICU visit, we eventually had to go the formula route. However, we were able to purchase our exact type at Costco and we paid around $150 a month for all her milk. Once you hit four to six months, you will start to either try feeding with baby food (home-made or store-bought), or you may try the popular baby-led weaning. (This process involves skipping baby food and going straight to food you may eat.) You may want to reserve an additional $50 a month to cover these costs.
Similarly, we were also able to buy diapers at Costco for around $50-$60 for a month’s supply. If you are interested in saving some extra change and want to go the cloth diaper route, most moms I know spent around $500 on their cloth diapering stations and diapers. They then didn’t have to spend an extra penny on diapers after that initial investment. It may seem like a high cost, but if your child wears disposable diapers for three years, you’re looking at a minimum of $2160. This could potentially save you $1660! Regarding wipes, I would buy a huge box of bulk wipes at – you guessed it- Costco for only about $20. This box would last me a few months between my home and daycare.
Take-away: Always check your membership-based warehouse stores, such as Costco and Sam’s Club, to see if your brand of formula is sold. You’ll have huge cost savings when buying in bulk for formula and diapers alike. For Target shoppers, their drive-up service was a life saver. I didn’t have to unload the baby and my visit would be less than five minutes.
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While You Were Away
For those mamas who will be returning back to work, one of the most dreaded moments is the first day (let’s be honest, first month) you have to trust another person to care for your little human. Assuming you will not be employing a nanny and have to find someone outside of your family for childcare, it can be a daunting task. But with all things, you have options! If you are wanting a low ratio of children to adult environment, you can opt to find an in-home sitter which will be cheaper on the pocket book. A day care facility will be pricier, but the advantages are typically same-age classrooms, educational learning, and more structure. (There were a couple of times that daycare had to inform me when my baby was ready to move up to the next step—which I was very grateful for.) In the city of Lafayette, costs can range from as low as $500 to as high at $750 per month for infant daycare whereas I’ve seen in-home sitters range between $300-$400 per month.
Take-away: I would budget $500-$700 per month for childcare. If you are more worried about having to drop your precious baby in someone else’s care-fear not. If you find that right sitter or daycare, your child will love his or her new environment. I’ve never felt more validated that I chose the right care than when my baby happily is in the sitter’s arms.
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Baby Clothes
Man do these go fast. It felt as soon as I bought one size, my baby was outgrowing and needed another size. My favorite stores to buy baby clothes were from Target and Carter’s sale racks. Especially Carter’s – they will routinely have a 50-70% off promotion for the whole store. You can always visit “Once Upon a Child” for gently used, more inexpensive clothes as well as sell the ones your baby has outgrown. Or my personal favorite-hand me down’s! I was surprised at how many close friends were willing to let go of their old baby clothes. It’s a win-win: you’re cleaning out their closet and finding frugal ways to avoid spending money on something that will only last around three months.
Take-away: Again, this is going to differ from family to family, but budgeting $50 a month on clothes is a good starting point.
Pro-tip: Pick up a couple of packs of generic, white, plain onesies (I liked Gerber). Suit up your little one in these during daycare and save the cute clothes for afterhours and weekends. Plus, they’re inexpensive!
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Two Helpful Items I Wish I Would Have Known About
The baby market out there is VAST. When I was researching for my baby shower registry, I was completely overwhelmed with the number of gadgets, appliances, tools and “must have’s”. There were things I bought that I didn’t even use. Thank you, $300 owlet and baby walker (many professionals say this can make baby walk later from use). Then there were some items I found out about too late such as the Baby Breeza and Doona.
Baby Breeza – as discussed earlier, I had planned on breastfeeding so formula feeding wasn’t even something I thought I needed to research. We were kind of thrown into the formula approach, so I just went with what was recommended by the pediatrician. It wasn’t until a good 10 months later I found out there is a device that MIXES AND WARMS THE BOTTLE FOR YOU. (The universe is so cruel). But having the frugal heart that I have, I knew I was closer to the end of formula feeding so I kept tracking on with my manual mixing routine, as the peasants do. However, if I could have done it over again and knew about this time-saving gadget, I would have definitely spent the $200.
Doona – While I write this, tears of pain come to my eyes. If only I had known what relief I could give to my arms. Spoiler alert: once you insert your baby into the baby carrier, it instantly feels like fifty pounds. As your baby grows, they only get heavier and heavier until you are counting down the days your child can walk. Trust me: looks can be deceiving. Once again, a good 9 months into my baby’s life I found out about a car seat called the Doona. It is the carrier, car seat, and stroller in one – because it has wheels. WHEELS. So, every time you need to take your child on the long walk from parking lot to grocery store entrance, they are traveling by wheel – not by your arm strength. I paid $279 for my generic car seat/stroller/carrier duo (regularly $379) and this wonderful gadget only retails for $599. Without a doubt, this is definitely worth the extra $300 in my humble opinion.
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The Approximate Total Cost of Your Baby’s First Year of Life
Finally, the number you’ve been waiting for! So how much does the total cost of your baby’s first year of life cost? Approximately $12,000!
Of course, this is purely an approximate number with so many different factors being considered. As we discussed previously, some of the costs to prepare for are healthcare, food, diapers, clothing and other helpful items. But if you plan for the number mentioned above, you will be sure to be well prepared.
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Learn how the credit union can help when preparing for a baby and contact us if you need help along your financial journey!