Cost of Baby’s First Year and Ways to Save
Having kids is amazing - they can give your life a deeper sense of purpose, cause a good laughing fit, and help you appreciate the small things. But dang, they are expensive!
According to the USDA, the cost to raise a kid to the age of 17 is $233,610, averaging out to $12,980 per year. This study hasn't been updated since 2015 and estimates inflation at 2.2% per year (we wish).
Experts are claiming that it now costs more than $300,000 to raise a child through the age of 18, as costs and inflation have been running rampant.
Nerdwallet reported that parents could spend between $21,000 to $52,000 in the first year alone! Now that's just insane. Oh and I should mention, these estimates don't include college costs - which as we know can carry a hefty price tag.
Let's take a step back. I know these figures are a bit daunting, but it all depends on you and your family's lifestyle.
Our First Year
The cost of our daughter's first year fell right at the lower part of the Nerdwallet range at $22k.
We were truly blessed and received countless support from our friends and family in the form of child care, hand-me-downs, and diapers. So. Many. Diapers. We didn't have to buy diapers for the first few months and are eternally grateful.
My daughter was also born in the thick of the COVID-19 pandemic and we were able to effectively keep costs down as we rarely left our home.
The cost of childcare is a large variable when estimating the cost of the first year. According to Care.com, the national average weekly cost can range from $221 for a family care center to $694 for a nanny. This can increase your cost by another $11-36k. My wife and I were fortunate enough to have a paid leave of absence and work remotely, allowing us to minimize childcare costs.
Ways to Save
Needless to say, the first few years of raising kids can be super expensive. Here are a few common areas in which parents typically cut down on costs.
How to Save on Food
This is one of the most important aspects of your child's life and I'd encourage you to not cut corners here as the first few years are critical from a development standpoint.
That being said, the first year is pretty dominated by formula or breast milk, more commonly known in our household as “liquid gold,” because of how valuable it is. We spent just shy of $1800 on formula in our first year.
It took some time to figure out what worked best for our daughter and her preferences, but we ultimately landed on Similac Pro-Advance (until an Abbot recall) and Earth's Best Organic. Going organic carried a higher price tag, but we were able to save big by shopping in bulk at places like Sam's Club and Amazon.
Take advantage of Subscribe and Save programs through Amazon, it adds up quickly. Going the breast milk route can be cheaper, you'll just need a few items (ex. breast pump), but your health insurance should cover most costs. If not, check to see if you can tap into your HSA or FSA.
Remember, fed is best! There's a lot of discord on this topic but I believe you should just focus on keeping your baby full (of good nutrients) and happy.
Saving on Diapers
We were fortunate and our friends and family gave us a few months’ worth of diapers. If you aren't into the traditional baby shower, invite all of your friends over, fire up the grill, and treat them to some cheeseburgers in exchange for diapers. It's a universal gift that everyone knows a parent will need.
Once we started buying diapers, we focused on buying in bulk when we could as those big box stores usually had the best price per diaper. There were times when stores like Target had better cash-back offers, so keep an eye out for deals and stock up when you can.
Pro Tip: Stick to one brand like Huggies or Pampers if you can. Many diaper brands have rewards programs that help cut costs.
Save on Clothes with Hand-Me-Downs
I still can't believe how expensive infant clothes are! I mean they wear them for such a short period of time - more often than not, they get dirty within the first use or two.
If you can join a hand-me-down group, you can save serious money here. This is when parents share baby clothing (and other supplies) with family members and friends so that everyone doesn't have to purchase it new.
Hand-me-downs will not only save you money during your baby’s first years, but is better for the environment too (waste reduction). I'd also check out consignment stores and organizations like Goodwill, as there are always deals to be had here.
Ways to Save on Everything Else
The infamous miscellaneous category, aka all of the other junk (oops, I meant to say totally "necessary" items) that you'll accumulate in preparation for and after having your child.
This is everything from furniture, toys, and gadgets to help make your life easier the first few months (ex. bottle warmer). You'd be surprised where you can find deals online for all of these things - try Craigslist and Facebook Marketplace.
One savings tip that worked extremely well for us was to purchase all of the big-ticket items such as the crib and car seats during Black Friday Holiday sales.
Sure, we bought the items months in advance of needing it, but we saved an average of 30% across the board.
We were starting from scratch so all-in we spent roughly $3k on everything from furniture to bottle drying racks. We spent a bit more than originally planned on furniture as we chose items that our daughter could grow into, so in theory, they should last several years longer than a few of the more affordable options.
Planning Ahead
Regardless of what your current life stage is, you should start planning for what's next. Start saving for those big-ticket items early on, such as saving for college, paying for braces, or helping your child purchase their first car.
Take the time and think about how your child will fit into your current lifestyle and determine if you need to make some changes. There's no need to immediately upgrade your home or purchase a mini-van just yet, but maybe consider dedicating a portion of your savings for your future bundle of joy.
