Babies are adorable, sweet, precious, and angelic.

Which, frankly, is the least they can be given how gosh darn expensive they can be to raise!

I don't think a single person reading this would be shocked at the notion that it takes a lot of money to raise a child here in America these days—even those of us who aren't parents.

But if you've never had the pleasure, and especially if you're planning to sometime in the near future, you'll probably want to wrap your head around a few hard numbers.

Today, we're going to talk about the costs you'll absorb in your first year of parenthood—and provide a few tips on how to soften the blow.

The Tea

$20,384.

That's right. It costs more than 20 G's, 200 Benjamins, 20,000 smackeroos to cover your first year of raising a child.

Young and the Invested Tip: Your exact savings goals—money that will be spent soon, an emergency fund, college for your child—should educate what kind of account you use to save.

That's according to new research from BabyCenter, which includes data from nearly 1,400 parents.

Included in these costs are factors such as feeding, diapers, clothing, activity equipment, and nine months' worth of child care. A look at the breakdown:

Your number might be very different from this—and you can use BabyCenter's First-Year Baby Costs Calculator to find that out.

Also, whatever number you reach here is missing one significant line item: medical delivery expense.

This number can also vary wildly just because of personal health variables and differences in coverage. But according to insurer Kaiser Permanente, the average cost for a person with a large group health plan to have a baby in the U.S. is $19,000, which includes almost $3,000 in out-of-pocket costs.

That's for a "normal" delivery.

"When complications arise—such as preeclampsia or a premature birth—costs can quickly spiral into the hundreds of thousands of dollars," writes Kari Carlson, doctor of obstetrics-gynecology at Kaiser Permanente Redwood City Medical Center. "And complications are on the rise: In the past decade, the rate of high blood pressure disorders in pregnant people rose by 52%.

On average, BabyCenter says, baby-related costs take up nearly a third of parents' total income. And for 15% of moms, these expenses make up more than half.

The Take

Understandably, these high costs have a significant impact on parents.

Stress is pretty much ubiquitous among current parents, with 89% of moms telling BabyCenter that finances impact their mental health.

And costs are so high that they're also dissuading parents from growing their families. BabyCenter says 26% of surveyed moms have delayed having more children because of finances, while another 25% say they've decided to have fewer children.

Young and the Invested Tip: Saving for your child’s future? 529s are considered the gold standard, but there are alternatives.

Short of a spat of deflation, it's unlikely that any of the important costs of having a child are going to decline anytime soon.

However, we can provide at least a few tips, including some from BabyCenter Associate Commerce Director Leah Rocketto, that can help you save money on child care:

• Nanny shares: In some cases, families that only need child care part of the time can come to an arrangement for sharing the same nanny, which can help lower per-family rates.
• Child and dependent care tax credit: Eligible parents can claim the child and dependent care tax credit for work-related child care expenses (i.e., you need the child care to work or look for work). The credit is worth up to $1,050 if you have one qualifying child, or $2,100 if you have two or more qualifying children.
• Dependent care flexible spending account (FSA): Whereas a regular FSA allows you to use pre-tax dollars to pay for medical and dental expenses, a dependent care FSA lets you use those pre-tax dollars to fund daycare, preschool, summer day camp, and other costs for dependents age 12 and younger. (Note: Dependent care FSA money can also be used on adult-dependent care.)
• Co-op child care arrangements: If you are part of a group of families who trust one another, a co-op child care arrangement—in which families effectively rotate child care responsibilities—could make sense.
• Employee assistance programs (EAPs): Some employers provide various forms of child care assistance, including subsidies or discounts at local care providers.
• Shop last year's models of common gear: A baby monitor that was considered state-of-the-art in 2023 or 2024 will work just as well as a newer version that has a couple of extra features. So while it's cheaper, it will still be safe and functional. (Also, remember: All car seats sold in the U.S. meet the same safety standards, so a cheap one is just as safe as an expensive one.)
• Buy some baby items secondhand: You can't use this advice universally—cribs, mattresses, and safety gear such as car seats should be bought new if at all possible. But you can often buy good-quality toys and clothing secondhand. And your state might even have a local public program that distributes car seats for free.

Thank you for spending a little time with us, and have yourself a great weekend!

Riley & Kyle

Young and the Invested

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