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I’m pregnant again! Looking back on the first two years with my older son, I planned my budget completely wrong. The new baby costs you hear about as a first time parent (gear, clothes, etc) are not actually worth spending money on. And expectant parents are hot targets for marketing, so you get a lot of misleading info on what you need. I was overwhelmed.
Even more importantly, babies come with hidden costs that did not occur to me before my son arrived.
In this blog post, we will go beyond the basics of baby budgeting and discuss some of the hidden costs of having a baby and how to prepare for them. As well as (my opinion on) what is not worth buying. May you learn from my mistakes!
Hidden Baby Cost #1: All The Healthcare Costs
Let’s break this down for both the US and the UK.
In the US, health care costs are the number one way that new parents get blindsided financially. Most people don’t realize that their entire annual family deductible and copays will come due when you deliver a baby. Both you and the baby are patients when you give birth. So if you are on a high deductible plan like mine, you will pay $5600 in family deductible, PLUS $7400 in copays. On top of your premiums. If your hospital and your doctors are all in-network.
For this reason, many American women choose an HMO for the year they hope to deliver a baby, because there is some strategy with choosing the right health care plan. With an HMO, the out of pocket costs are far lower. HMOs also tend to have excellent maternal and child care, though you won’t have a fancy hospital room.
In the UK, it costs $0 to have a baby with the NHS, but that doesn’t mean you get off free. There are other treatments that might not be covered, might have a long wait time, or might be acute and hard to get covered. You’d rather pay cash money. Some examples: therapy for postpartum depression and anxiety. Physical Therapy to get your pelvis back together or to restore your continence. You may choose to throw money at these issues rather than wait for a spot with the NHS. UK moms have access to other free resources for having a baby as well.
Pregnancy and childbirth are very hard on your body, so you will need more healthcare than normal. It’s worth reining in your healthcare costs by using alternative plans and resources.
Hidden Baby Cost #2: Backup Childcare and Babysitting
If the pandemic has taught working moms anything, it’s that childcare is a precious and necessary resource that can get very expensive. Most parents plan for the costs of their primary childcare, but most forget that you need backup.
Childcare is one of the leading costs of early parenthood. But what many new parents don’t realize is that you need backup childcare, too.
You will often need last-minute childcare should your regular childcare fall through. This can happen quickly: a babysitter cancels, grandma gets sick, your daycare shuts down by a stomach bug, or you get called into a critical presentation unexpectedly. I was totally blind to this.
A note on family care: Family care evaporated immediately for many families during the pandemic. When you plan your budget, do not plan to rely on grandparents for much or long. While some will step up, others will not or will not be able to. Lives change over the course of early childhood. And it’s sort of a dance while you figure that out. They are great for bonus help.
You should have at least one night out per month factored into your budget for a baby, to maintain your sanity and marriage. And 10-15% extra budget for emergency backup babysitting.
Hidden Baby Cost #3: Feeding an Exhausted Family
One of the first new-baby budget items likely to break is the food budget. Let me paint a scenario for you: Your baby is seven weeks old, not yet smiling at anything and still on a three hour sleep rotation. You have exhausted all your freezer meals. Your family has stopped bringing food over. Your longest stretch of sleep in the last week was five hours. And you’re ravenously hungry because of exhaustion and breastfeeding. When my son was 14 weeks old, I ate a butter sandwich in the shower and was grateful for it.
In this low moment, takeout and food and grocery delivery will be your friend. And there is absolutely nothing wrong with that. You need to eat. The mistake new parents make is not planning for that flex in their budget.
The most brutal period of new familydom is the first four months. Plan for extra food budget during that time, and for the extra cost before baby arrives, if you plan to stock your freezer.
Hidden Baby Cost #4: Formula
Many frugal women factor in breastfeeding as a great way to save with a newborn, but it’s not always possible. Babies need to eat, full stop. You may have a baby who has food sensitivities or trouble gaining weight. You may not produce enough milk (this was my issue). Or you may simply not want to breastfeed, which is a valid choice.
Formula is expensive, especially if your baby requires specialty formula. Your baby will go through, on average, 3-4 of those big cans a month, so maybe 100 oz of powder. That can range from $0.75/oz to $2/oz. You should have at least $100 set aside in your baby budget for formula each month, especially in those early months when growth is most important. Formula, unfortunately, is not covered by FSA or HSA plans in the United States, but women in the WIC program can get some formula covered – it varies by state.
Similarly, women in the UK who qualify for the Healthy Start program can use those benefits to purchase formula.
If you plan to breastfeed and supplement with formula, I still recommend having this money saved. Because as any new mom will tell you, there is nothing more stressful than trying to feel a hungry newborn. Fed is best.
Hidden Baby Cost #5: The Best Stroller You Can Afford
Controversial opinion: a great stroller is worth the splurge. When I was pregnant with my oldest son, I was SHOCKED by the cost of strollers. I thought, how can something that just holds a baby cost over $500? I waffled and finally gave in to the many voices around me. Two years later: zero regrets, and we will get four more years out of this stroller. Here’s why it’s worth the investment:
First, a good stroller will get you out of the house when it is extremely hard to get out of the house. You can toss the baby in and go for a walk, and enjoy it. The baby enjoys it. A bad stroller, by contrast, is like pushing a baby down the sidewalk in a broken shopping cart. The baby screams. You hate everything. This is an especially important investment, if anyone in your family is active. It can be hard to get in some exercise with a little.
Second, they last a long time and have awesome resale value. Good strollers can accommodate all phases from newborn to young child, so can use it for years, and then resell it in a mommy group.
Third: it’s a sleep machine. A stroller with a smooth ride is one of the best ways to get a sleep resistant baby to pass out.
Pro Tip: buy it used for a fraction of the price and take it to a bike shop to get some maintenance so it rides like new.
What not to spend money on for a new baby
There are a lot of “must haves” for new babies that are utter nonsense. As a first time parent, it’s REALLY hard to know what they are. Here’s my list of expenditures to avoid:
- Don’t buy full price diapers. There are a ton of ways to get discounted and free diapers, a major savings for the first three years. We also happily used cloth diapers in a hybrid model, to lower costs. They weren’t bad!
- Don’t buy new baby clothes. Why? Babies grow very fast, so they will be in that special top for only a few months. I was nervous about hitting up friends for hand me downs, and should not have been. Seasoned moms want to get rid of their gear to a good home. Now, I buy outfits for special occasions, and shamelessly ask friends with older, larger sons for their castoffs.
- Don’t buy new baby gear. With maybe the exception of a carseat, which is safer new, you don’t need new baby gear. Similar to clothes, there is a very short time before the exersaucer, the bouncy chair, the bumpo chair, the swing etc. are all useless. Your baby will outgrow or move on from these items quickly.
- Don’t buy toys. Little kids don’t need a lot of toys, and somehow manage to wind up with 47 teddy bears. We invest in very few toys, and instead make lists for Christmas and Birthdays for the family. That way no one goes off the deep end with plastic kid junk, and you meet all the toy needs without spending a dime.
- Controversial: Books. I love books, and have a huge personal library. I was really excited to start reading to baby from day one. But here’s the thing: there are libraries. With hundreds of kid books. And it’s free. It’s a lifetime gift your kid to this wonderful resource. That said, my husband and I are huge readers, and we buy books. Lots of them…so we don’t go insane reading the same board book 250 times. Used book stores are a great resource.
In conclusion, there are hidden costs of having a baby that new parents should be aware of. However, there are also ways to save money by utilizing resources such as hand-me-downs and libraries. The most important thing is to stay sane, stay married, and make sure your baby is fed, clothed, and safe. With that in mind, spend your money where it counts. A good stroller is worth the investment!
What are some other hidden costs of having a baby that new parents should be aware of? Share your tips in the comments below!
About the author
Claire is a Chartered Financial consultant and toddler Mom. Her blog AskFlossie offers practical, trusted financial guides for single women and moms.