First Baby New Expenses? One Family’s Experience

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The following is a guest post is from Elle at Couple Money. They live on one income, and have fun with the second!

When I read MMB’s questions about baby expenses, I shared a bit of our own experience with him. We are just a year ahead of him last summer we had our first baby, a little girl. It has been a wonderfully fun ride so far, with everyday bringing new milestones and challenges.

During the pregnancy my husband and I decided to track the baby expenses on Couple Money as we’re going through this process. We’re not the first parents to have questions about the finances of raising children, so I share our expenses and have asked others to give their input. Some wonderful bloggers have decided to join in the fun and share their own stories, tips, and advice on what works, what doesn’t, and what’s not worth stressing over.

Are Kids Really That Expensive?

For us, most of the expenses are just small bumps in our monthly budget. I think the main reason is that we made some financial decisions before we became parents that lent itself to reducing baby bills. For one thing, when we first were married we made it a family goal to keep all necessary expenses on 1 income. That allowed us to use the second income to pay down debts, save for goals, and invest for later.

Health Insurance and Doctor Visits
During the first trimester I was dehydrated enough that I needed to go to the ER to replenish; that was about $150 out of pocket. For the most part, though, my pregnancy had been uneventful. The health insurance policy we had when I was pregnant had a $2,500 deductible, so we saved a bit in our general funds to cover the deductible when our baby girl was delivered. Saving up to pay the bill in full allowed us to also get a 15% discount with the hospital.

Once our daughter arrived we quickly added her to my husband’s health insurance policy. That’s been the biggest change to our family budget – our premiums went up about $200/month for the family option.

No change in our housing bills. We bought our townhouse before we had our daughter. It had 3 bedrooms, so we converted the guest room into her nursery. We don’t have any plans on changing our location, right now we’re focusing on paying down the mortgage.

I know that for many parents daycare is a huge expense. From what I saw last year it was about $1,200/month for an infant. Right now I work from home and our daughter stays with me. While it has cut back on the hours I work, the savings from not having her in daycare offsets it.

Since we’re breastfeeding our food bill has increased just a bit to accommodate the extra calories I need to keep up. Since becoming pregnant, we changed our eating habits a bit. We’re focusing on making more meals at home and we a part of a CSA program with weekly deliveries during the part of the year. It’s been helping to keep groceries manageable and we’ve also discovered new recipes and dishes. Our daughter has baby food and some of what we’re eating in addition to breast milk.

Even before we found out we were going to have a baby my husband and I were saving up for the vehicle as we’re trying to avoiding taking out a car loan. However we saving up a bit more to purchase a family sized sedan, like a Sonata. Our budget is $10k for the next car. We have the money saved and we’re currently searching for a deal. It’s not an immediate need (tight fit in my Jetta, but fine), so we’re going to make sure we look around a bit before securing the next car.

Clothing/Baby Gear
The first 2 months our bills were higher than normal as we bought a few items we didn’t receive from the baby registry. We waited until our daughter arrived to see if we really needed them or if they were nice to have items. Fortunately most of the necessary stuff was already bought. After the first 8 weeks, our expenses have smoothed out.

We have received gifts from family and friends – both new stuff and gently used. We didn’t have to buy a baby swing, since a buddy’s son didn’t seem to like it. It was practically new and our daughter loved it.

Right now diapers are about $20/month give or take through Amazon Mom and they are delivered right to our door. We get her wipes through Costco where a huge box costs about $20 as well (lasts a couple of months). Any clothes that she needs we pick at Target, Old Navy, or the consignment store around the corner. That’s about $30/month.

Thoughts on Having Kids

This is just a snapshot of our family’s baby expenses. As our little one gets older we know things will change. I’d like to hear from you – what expenses to you have to cover for your little one? What has been the biggest unexpected expense? What’s been the best surprise?

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  1. Brad Ford says

    Her budget is not feasible for most couples. In particular, it is nearly impossible to stay home and make money on the side while taking care of a child. Until they are older, they need constant attention.

    Anyone who has a child should expect huge daycare expenses or significant lost income unless the have relatives available to take care of the child for them.

  2. I would second what Brad says about child care. I have an IT job where I can WFH occasionally, but I have found that I cannot do it when watching my child. I may be on a conference call, when my daughter decides to wake up and cry. Besides, if I want to get work done, I need to put her in a crib, and basically ignore her. I have about 3 hours per day where I can work, and that is when she is sleeping. So, if she gets sick, and needs to stay home from daycare, I usually take half a vacation day, and work from home for half a day (at best…sometimes I just take the full day off to avoid having to count my hours working).

  3. I will “third” what Brad said. Everything comes at a price. If you’re going to stay home to work with an infant, either your work will suffer or your child will, or both. Not giving your infant the constant attention they need has been shown via lots of research to be detrimental to their brain development in the long run. And just because your friend had a baby that happily napped six hours during the day and they got all kinds of stuff done in that time does not mean that your baby will do the same. Ours naps for 2.5 hours on a good day.

    I will add that I think sedans are not all that great for transporting babies. We have a Sonata and getting baby in and out of the car seat is a bit tricky while trying to not bump their head on the doorframe. If you can afford something more like the Mazda 5 or a wagon or small SUV with a larger backseat doorframe (minivan seems over the top) I think you will find it very much worth the expense. (Our other car is a Mazda Tribute and it works great.)

    And I’m surprised that college savings didn’t make this list. In today’s world, you have to start very early or it’s very hard to catch up. Not saying the money has to be specifically for college at this point (i.e. 529) but should be set aside in one way or another. Especially since at this point I would say that assuming student loans will still be readily available 18 years from now is not a sure bet.

  4. I’ll echo Brad and Steve. I also think that this article is focused on the ‘honeymoon’ period of children (the first 3 months). Diapers get MUCH more expensive as they grow (because the packages reduce the count and up the price). Food gets much more expensive, home utilities get more expensive.

    Additionally, kids need so much unforseen medical attention. We went into parenting with a mindset that we rarely go to the doctor. Once we had kids it seems like at least once a month we’re there because something is going on we’ve never encountered before and your parenting instinct is to get them well as quickly as possible.

    Lastly – $10K seems unreasonable for a car if that’s all you’re expecting to spend. Sonata is a decent sized sedan, but it’s a Hyundai (and at 10k, an older one) which means you’re likely in for repair bills sooner rather than later.

    We too live on one income and find it a stretch – it’s fortunate for you that you actually have TWO incomes which makes this article a bit misleading.

  5. Alexandria says

    “Anyone who has a child should expect huge daycare expenses or significant lost income.” So true, the first couple of years. I do know a lot of people that worked opposite shifts and such, but you have to be pretty desperate to do that with a baby. I found it hard to function working full-time with a very helpful spouse at home. If I had to take full baby duty at night while he worked??? Not sure how I could have pulled it off. Though when you have no choice, you do what you have to do. That said, I admit the *big* daycare expense is only the first few years. There is also a huge element of my work not suffering and me being able to be paid MUCH more in the long run, because I did not have baby distractions. Ever. People discount that when they both work. Most women I work with accept far less pay for less hours and more flexibility. I don’t need to do that with a stay-home spouse.

    I mostly identified with the article, and it echoed my comments to MMB’s annoucement post – I had mentioned healthcare being insane expensive, and how we had always lived on one income, which made the transition easy (my spouse hasn’t worked in 10 years).

    To add to the car – I personally have no idea what it is about having children that dictates you need a giant car. *Most people* we know have minivans/SUVs – as they feel they have to with even just one or two children. To be FAIR, we did buy a minivan when are kids were a few years old, but we wanted one anyway. There had always been a van in the family to borrow to haul things, etc., and we had talked about it many years after the in-laws sold their van. BUT, our primary driver is a 4-door subcompact. You can buy more modest baby seats and baby gear. Our kids both had big carseats maybe for a year, which is when we went ahead with the van purchase. But, I wish we had waited. Now our kids are two toothpicks in the backseat – they don’t need any carseats or leg room. We won’t *need* a bigger vehicle until they are gangly/tall teens. I caution parents on making huge/expensive decisions for very short-term problems. WE often vacation and camp in the subcompact gas sipper. You know how many people told me they had to buy a SUV, or a bigger dedan, for a safe carseat? *rolleyes* There are excellent carseats made for smaller cars.

    I think $10,000 is very realistic for a car purchase. Obviously they will be buying used – we didn’t pay much more for our minivan. I actually had a sports car (no backseat) when my first child was born, and in great denial about it. Anyway, when he was a few months old, I finally gave in, sold the car, and bought a newer and more roomy sedan. IT cost $800 and I kept it until the temporary annoying 2-giant-carseat situation (drove it 3 years). Would have been a fine car for years longer. IT just had a *lot* of miles on it – was used. BAsically, selling the “low mileage” sports car, we saved money getting a more practical sedan – even though it was a newer/safer model. You can spend as much as you want on a car.

  6. Alexandria says

    So sorry for the novel!

    Just wanted to add that this is one of those things where it tends to be so individual per family. When it comes to children, no two budgets will look alike, really. I just think the more perspectives you get, the more pitfalls you see and the more ideas you get to keep costs down. That’s really all you can do, be aware of many different scenarios.

  7. If both parents work (by choice or necessity), *good* daycare can be very pricey. And it may continue in some form for years as children need before- and/or after-school care or programs. The price tends to drop as the child gets older, but it still exists. And as your child hits kindergarten, there will be need for summer care/programs/camps/whatever if one of your bosses frowns on taking the three months off.

  8. I think the major expense with kids (all be it indirect) is your time! There is no more time, but a lot more commitments. I have found the value of time has continued to increase with our child and now spend significantly more money to save a little time when we can. That is probably our single biggest increase in monthly expenses.

  9. @ 2million: Without a doubt, you’ve nailed something overlooked in financial analysis.

    When you have children, you suddenly realize that despite how “busy” and “productive” you were before children, you had a boatload of time to devote to those activities (plus had some time for hobbies and interests). With young children and work, the day is filled, so you find yourself sending money for services to free up more time if they exist (and you have the money).

  10. Childcare is our biggest expense. Everything else contributes a negligible increase to our overall spending because the increase in cost is offset by our reduction in dining out and entertainment expenses.

    I’m planning to get a new car, but I’m due for a new car regardless. However, it will be an SUV instead of a sedan so there will be some increase in purchase and maintenance cost.

  11. Thanks for the feedback, as I mentioned in the article our choices before the baby has helped with keeping expenses lower. I think having necessary expenses covered by one income has made a huge difference with transitioning into parenthood.

    I would argue that given time, some couples can adapt and find a way for one to work from home, even if it is part-time. That said, I don’t think every couple wants to do that and that’s fine.

    I think part of the equation is also consider what the family wants to do. Each family has their own priorities and commitments. Respecting that fact with others allows us to see how our neighbors live and take bits and pieces that work for us.

    If you visit the baby expense series on Couple Money, I’ve had guest bloggers share their family’s finances with children. Each have their own successes and their own struggles. It’s fascinating to me to see how family’s adapt. I’ve picked up things from them and adjusted it to fit our lifestyle.

    As far as buying used cars, Consumer Reports has repeatedly shown that you don’t necessarily have huge or constant repairs if you buy certain makes and models. Their recent auto issue had many options and it helped us narrow it down to a few models, Sonatas included.

    I understand if you want to point out what’s ‘unrealistic’, but I think a more productive way to think about it is offering what your family does to keep baby expenses manageable. I’m sure you can offer some tips for other families.

  12. 2million is so right. Time is the elephant in the room. By the time my wife and I had kids, we already owned a house with enough bedrooms for the kids and my wife had already stopped working to stay home for a few years with the children. Thus, we assumed our additional expenses would primarily just be food, clothes, increased health insurance, and a few minor misc items. This turned out to be totally naive.

    We track expenses very closely, and so we could see that after we had kids, our expenses went up materially in nearly every category. This was baffling at first as many items seemed like they had nothing to do with the kids. Eventually we tracked this down to time.

    Parenting takes a huge amount of time, which means now you have far less time to compare prices between stores, do repairs and yardwork yourself, cook, work OT hours, etc. This all adds up as you attempt to make do with less time. Additionally, we’ve found that we essentially “pay up” for the chance to free up hours to be with our kids. Trust me…all of this together is a LOT of money.

  13. How much people spend on a child will vary wildly. It depends a lot on the circumstances. For example : Some people have great health insurance with $0 out of pocket costs so adding a child would add nothing to their health crae costs. Other people already max their deductible due to their own chronic illness and again adding a child would add $0 cost.

    One thing about kids we take for granted is the housing. Elle already had a 3 bedroom. But what if they had never planned to have children, then theoretically might they have instead bought a 2 bedroom to begin with? Maybe. Most people with larger houses wouldn’t have a need for 3-5 bedrooms if they never had kids. So there is an additional cost for housing, we just don’t see it cause we’ve built it into our budgets.

  14. I keep my kids in private school because government schools are horrible. That costs a lot, but my kids are worth it.

  15. @Elle

    I don’t think your situation is typical. I don’t believe that most people in America can afford to live on one income. I think there is a certain segment of the population that can but I do not think it is typical. Just as I do not believe all employers provide health insurance and there’s definitely a large disparity between how much each employer covers of the total premium or what each plan covers. I think it’s great that you and your husband have nice jobs and make decent enough money to live off of one income. I think everyone should be so lucky.

  16. Jenna, Adaptu Community Manager says

    That is so awesome that you receive so much from family and friends! Congrats on staying on budget.

  17. echo child care….I have two in child care….My cost over 30k per yr.

  18. The big cost for us is daycare as well. All the other stuffs are pretty small. We didn’t buy too many clothes or furniture.
    How do you stay productive working from home with a baby? I can’t do anything while he is up.

  19. 10 thousand is conservative. Childcare expenses will eclipse that. Add in four or five k for college savings. Sundry dumb things like bases for carseats, strollers, etc and i am guessing closer to 18k a year in the early going. By the time the kid hits school age you will have to accelerate college savings to over 10k a year if you hope to have the expected two hundred fifty large saved up for junior’s college expenses.

    Two kids… Can’t even conceive of the insane cost, not to mention time suck. Kids are neat and all but man is your life drastically altered.

  20. Hey Joe @ Retire By 40!

    That’s a great question about working from home. I had been working from home before the baby, but I knew we’d have to make adjustments to the schedule.

    First thing first, I took maternity leave and ease myself back to work. after trying out different schedules, the short story is that I work while she sleeps or plays (she has a steady schedule) in the morning. I then take a break for a few hours and spend time with her, getting errands done.

    I then get the rest of the work done in the late afternoon/evening. When deciding to work from home I wanted to maximize flexibility, so most of my clients contact me through email. I schedule calls during her nap time and if I need help, like someone watching, I’ll call someone.

    It’s a system that is working for us right now. Of course, with kids, things can change, so when that happens we’ll adapt. That’s parenthood, right? 🙂

  21. I’d also wanted to add that Mr. Money Mustache is a great resource for finding reliable used cars and he’s written several posts on the topic.

  22. These comments are very interesting (and very different than those we see on our blog!).

    I think that the idea that certain expenses are essential is due to the way our culture/society works and what is supposedly expected of us. The truth is, you CAN do things differently IF you make it a priority.

    When you design 2 jobs, a long commute, a big mortgage, etc. into your life, it can be hard to get out from under it. But, if you design a simple lifestyle, short commute, and time with your kids into your life, it is possible. Not only that, it can be easier that you imagine. Take a hard look at your spending and your lifestyle and think outside the box! You can figure it out, but it often means going against the grain.

    We have a 6-year old child. With the exception of health insurance, the cost of having that child was minimal. Our priority was to stay home with our child (both of us!), so we made it happen. We never sent him to daycare (even though we don’t have any family near us), we used cloth diapers and sold them later for nearly the same cost, we bought a used crib on craigslist for $100 and sold it later for the same price, we asked others for clothes and bought everything used. We didn’t buy any of that baby registry stuff since it’s not even required. The used market for children things is ENORMOUS! There’s no need to ever buy your child a single new thing. But they deserve it, you say! Actually, they don’t even care. They’d rather play with you.

    Elle’s article is not something to dismiss as something that you can never do, it’s something to ponder and to think about and if it’s important enough to you, it’s something you can implement in your own life – an example to learn from. I’ve seen many families from all kinds of income levels do it. I’ve also seen many families say they can’t, when it’s clear that they’ve just set themselves up for failure.

    You can decide to spend a ton on your children or not. You might have to make sacrifices, but I think it’s totally worthwhile.

  23. My husband and I changed how we budgeted a couple of years ago. In doing so, we were able to “accidentally” pay off the car and pay cash up front for the birth center that we decided to use for our son (who was born in October).

    I guest posted about our budget at Get Rich Slowly:

    We received gifts from folks which helped a lot, but it was mostly clothes. We bought our own car seat, which was our second biggest expense, after a breast pump. We never bothered with a swing or a bouncy seat. It turns out there are programs through some of the local hospitals where we can get a convertible car seat for $25. Our little boy has already outgrown the infant seat; we plan to take advantage of the car seat plan.

    We’re cloth diapering. We used one size for the first couple of months (that we bought on Craigslist), resold those and bought another crop that will last us until he is potty trained. I made wipes out of old receiving blankets that were hand-me-down from a friend. Total net cost for diapers: $300. Our water bill has gone up about $8/month; our electricity bill has stayed the same. We line dry everything anyway.

    Breastfeeding=no formula. We have some bottles for pumped milk. I store milk right in the (glass) bottles, whether they’re in the fridge or the freezer, so no disposable anything on that front.

    When we needed more clothes, we went to a swap, where for $5, we traded in a bag his newborn clothes for a bag of 6-9-month clothes. It will be a long time before I will go to a retail store and buy him clothes off the rack. Swaps, consignment, hand-me-downs, and thrift stores are the way to go.

    Almost all other baby/toddler items, if we’re not just skipping them altogether, can be bought used as well.

    Adding him to my insurance has been the biggest financial hit so far, costing us just over $500/month. That’s less expensive than it would have been to add him to my husband’s plan, and the plan is better.

    We’ve had a few doctor’s visits, of course, and had to pay copays, but those were easily absorbed.

    My husband is a teacher. I teach part time and own a personal training business (which is just starting to regain life, but no income from it now). In the last few years, we both took pay cuts, then had salaries frozen, then had benefits cuts. Neither of us has received a raise in five years.

    After the kiddo was born, I took advantage of FMLA and was home for several months. When I went back to (part time) work, my husband took FMLA and is currently home with the little guy. Then we have the summer off.

    If we can figure out a way to insure the baby and I, I will be staying home next year. We can make it on his salary. It’ll be tight, but it’s 100% worth it to raise my own child. However, to add the baby and I to my husband’s insurance will cost about $1200/month. We can’t do that on one salary. (Heck, it would be tight on two salaries.)

  24. Joe – 30k a year in child care? Wow.

    As a long ago veteran of child rearing as a stay-at-home dad, I understand how everyone’s situation is different. And I also understand how a job isn’t (always) just about the money. But with 30k a year for child care, the second job holder has to be making at least 40-45k a year just to break even on that – and that doesn’t count the extra expenses he/she might have with clothing, gas, etc that goes into having a job.

    20 years ago, when we had our first child, I was already working from home primarily, so I became our children’s primary caregiver. Given the nature of my work (computer programmer), I was able to cut my hours back to part-time, and made it work. People here are right, it is hard to get things done with young children to care for, but if you are able to get part time work as I did, it can work, if for no other reason than you can get part time childcare much less expensively. I often had teenagers come and babysit while I was still here, doing some work, and I also found many childcare places would give a decent hourly rate for less than a full day care. So, working from home with children CAN work, with a little creativity.

  25. Brad Ford says


    I did not intend to be mean. If it came off that way, I apologize.

    My main point was that taking care of the baby AND working at the same time is not feasible for most people. When one of us has to stay home with our daughter, we never get any work done. If we have a 2nd child, my wife will probably stay home because her “net” pay would be small and we could survive on one salary for a while.

    In terms of expenses, daycare is by far the biggest expense we have with our child. It is nearly the size of our mortgage. The other child related expenses have been easily absorbed.

  26. Yes I know the child care cost is insane.. and thats a average day care.. Top child care providers run almost 20k+ per yr in my area. My wife and I laugh…..At our top two in state public universities, we could almost send both of them….The only good thing is my wife and I are use to paying it, so we will just divert that money to a college fund once they are in public school. (My oldest starts kindergarden in fall) Now if I get my wife to stop pestering for a 3rd one.

  27. No problem Brad; I didn’t take your comments as trying to be mean.

    My intention with the guest post was to share our story. As I wrote there were many factors before the baby came that lead to the relatively low expenses. I wanted to share how we manage and I was reading the comments to pick up some tips on things we could use ourselves.

    I think some comments veered off into the ‘this won’t work’ and kind of stayed on that subject rather than brainstorming what could work.

    I know certain jobs/careers may it impossible to juggle both watching the kids and getting the job done. I’m fortunate that I can do it right now. That could change and then we’d have to adjust accordingly.

    I appreciate reading your comments and the others. Parenthood and finances are tricky things because you’re looking at so many factors(emotions, money, prior commitments, and current circumstances, to name a few).

  28. Richie Rich says

    On I came across 2 free magazine subscriptions to BabyTalk and American Baby.

  29. Tyrone Biggums says

    Good piece and relevant to us as we are planning for a baby relatively soon.

    On the flip side of things, what expenses do you expect will DECREASE after having a baby? I thought perhaps our eating out expense will go down, but I’m thinking we’ll be getting take-out often if we are too tired to cook. So I am keeping that the same.

    I know our travel expenses will be cut. Currently we do a lot of vacations (both long and quick weekend vacations). So our airfare and travel expenses should take a big hit.

    Also, I anticipate entertainment expenses will be cut. Not much time for going to movies, playing golf, drinking with buddies, and bowling. Also, less time will lead to less money being spent on buying books.

    What other expenses do you see decreasing after having a baby?

  30. My city has close to the most expensive daycare in the country. You can easily pay $2500/month for fulltime infant care. Next year we’ll be doing a 3-year old 4 days for $1700 plus a newborn in two days at $1200. I’m counting the months (21) that we’ll have to do that for. Hopefully that’ll make some of you feel better about where you live 🙂

    I do wonder what it is that makes people think they need to get a new car for a baby, though. With the infant carseats it’s easy to get them in and out, and get one of the car seat stroller frames and it take up very little space in the trunk. Even after that we got a Maclaren Quest and it folds up to take very little space. Maybe once you have two kids I can see needing the cargo space.

  31. Please look at the bright side; having a baby could bring you happiness that money can’t buy. Also, you could constantly watch his/her growing, his/her “firsts”, and you could learn how you grew up by re-living your childhood, by watching your child’s growing. Thus, have your mood ready welcoming your baby’s arrival, and spend as much time with the little one as possible. The payback is that the baby will become very close to you. That kind of relationship cannot be traded of with anything else.
    I would like to share with you that my daughter is very close to my husband–the daddy pays attention to her since she was born; now they share similar interest and talk. When they walk together, my daughter’s hand is on her dad’s shoulder and they talk and talk and talk …
    Hope you pay full attention to your baby. The return is …

  32. Just an update, we did purchase a car a couple of months (07 Honda Accord) for about $10k through Craigslist. Better gas mileage and a bit more room in the back for passengers.

    As for diapers, getting through Amazon with their subscribe and save program has the cost around $18-$20/month.

    Food expenses have decreased as it’s grill season and we’ve had people over for pool and dinner.

    clothes are holding steady at about $30/month. We shop at a kids consignment shop for seasonal outfits. Everything that we have bought is in excellent condition.

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