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Becoming parents this summer has been the biggest change in our lives. So far it's been a blast with our daughter. She's such a happy and laid back baby.

We did our best to prepare for the big event including emotionally and financially.

I've heard from people (friends and online blogging buddies) that raising a kid can be expensive.

I decided to look at the numbers and examine how our baby girl is affecting our finances.

Can You Afford Having Kids?

Is raising kids really expensive? I go over the numbers to share how you can save money while taking great care of your children! #family #money

Where do people get that idea that kids are expensive? One source often cited is the USDA's Cost of Raising a Child Calculator.

Based on how many kids you have and how old they are, you can get national and regional averages for the costs associated with children.

I tried it out to see what it said and compare it to our expenses. Here's how it breaks down for a child under 1 year of age:

  • Housing ($4,375)
  • Food ($1,675)
  • Transportation ($1,863)
  • Clothing ($913)
  • Health Care ($963)
  • Childcare ($3,238)
  • Other Expenses ($950)

The grand total is $13,975 for the Southeast. The national average for a child under the age of 1 is $14,938.

Looking at the Costs of Raising Kids

Is raising kids really expensive? I go over the numbers to share how you can save money while taking great care of your children! #family #money

If you look at the numbers though, many of the expenses are sunk costs.


We bought our townhouse before we had our daughter. We have no intention of upgrading our housing JUST for her.

We converted our guest room into her nursery. It's the smallest bedroom area, but it's definitely big enough for her right now.

We don't plan on moving in the immediate future. We're working to pay off our mortgage faster by sending in extra payments.

Since the baby expenses haven't hurt our budget we're planning on keeping the extra payment amounts the same. However, should we need more wiggle room in our budget, we'll redirect those payments.

I think the increase in housing is due to utility bills increasing. Right now, we've seen our electric bill go up, not because of the baby though.

With the heatwave, we've had the air conditioning on. With the cool down (relatively), we've been using the windows and fans.


We choose to breastfeed, not for the financial benefits (it's free!), but for the health ones. So far it's going well.

Groceries have gone up as I'm eating more to accommodate my new role feeding my child. The plus side is that we're eating out less often and cooking more meals at home.

Should something change and we have to switch to formula, it will raise the costs, but I still don't see how it would add up to almost $1,700. Sites like Baby Cheapskate often posts deals on formula, so parents who are formula feeding can get some savings.


While the baby hasn't affected our transportation bills yet, she will have an effect on what car we purchase next year.

Right now my husband drives a coupe and I drive small sedan. We were planning on buying a car, but we're looking at roomier cars with the baby on board now.

Our plan is to buy the car with cash, either a family sedan or a small crossover. I'll track our progress with our next car purchase.

Health Care

I think having a baby will affect this area of our budget the most. Who knew babies needed so many well visits? Fortunately we have well visits covered 100%.

We have a $2,500 deductible, but when we had to pay that for her delivery, we had most of that reimbursed by my husband's job.

What eats a big part of my husband's paycheck now is the health insurance premiums. Before the baby, our plan was costing us $101.06 every paycheck.

Now the family premiums are $193.33 each paycheck. If we decide to have more children, the premium doesn't increase.


I'm really surprised with this one. I realized that we're fortunate to have our friends grab some of the baby's outfits for us at our shower.

For us, we have bought a few items new, but I'm a big fan of the kids consignment shop near us.

Babies grow so quickly, I wouldn't want to spend a huge amount of money on my daughter's clothes.

Thoughts on Having Kids

I know we're just beginning this journey, so numbers will change as time progresses, but I want to share what we've learned so far.

I hope having an open discussion about the finances of being parents can help us to pick up tips from one another.

I do think parents should be prepared and save money for expected and unexpected expenses.

I agree with Glen's post that many well meaning parents that sometimes they go overboard with their kids.

It's a balancing act and we have keep an eye on our own spending. I'd love to hear your tips and stories.

About Elle Martinez

Elle Martinez helps families at Couple Money achieve financial freedom by sharing tips for reducing debt, increase income, and building net worth. Learn how to live on one income and have fun with the second..

38 comments add your comment

  1. I think there is some upfront costs for baby stuff that you more or less need but I don’t see our bills skyrocketing either. Our work provides health insurance as part of our benefits and we are using cloth diapers (more laundry but less cost and waste). We too hope to breast feed – it makes so much sense!

    • I can’t wait to see your posts on the topic when your little one arrives! Please share your experience with clothe diapers.

  2. Your premium with just the two of you is only $101.06?? What insurance do you use? I get BCBS through my job, which is free for just me, but if I were to add my girlfriend on, it would be something like $400/mo!

    • We have Blue Cross/Blue Shields here as well. It’s $196 each paycheck which is twice a month. Not excited about the higher costs, but it’s necessary.

  3. Great post. If only I could convince my friends who have just had kids to be as frugal as you. I wonder how this might change as children grow up. Certainly, the cost of college (if you choose to pay for it) will change this figure some.

    • We’ll include updates on parenting expenses. We will set aside some money for college or a specialized trade school. It’s something we’ll continue discussing and working on as a family.

  4. We have 4 kids, though they are all now adults. I breastfed them all & it saved a lot. The first was in cloth diapers, but when the second one came & the first was still in diapers they both got “pampers.” I was very frugal, buying many baby clothes second hand. Of course we received clothes as gifts too. We had a crib given to us (that did not have lead paint.) We didn’t buy a lot of expensive baby stuff, just what was needed for safety. We didn’t decorate the baby’s room to the nth degree. We did spend some money on “educational toys” and books. We were lucky to have a good health care plan from my husband’s job that paid 100% on all doctor visits and medicine. That was a tremendous help.

    We didn’t buy used clothes after babyhood, but clothes got passed down through the 4 kids. We had 3 boys & a girl, & I have to say a girl costs more! The clothes! Our biggest expenses came when they went to college, with some being in college at the same time. Ouch. We’d saved for it, but there were some lean years in there for us.

    • Thanks so much Maggie for sharing your frugal tips. My husband and I are absorbing all this information and seeing what works for us.

  5. I recently read an estimate of $500,000 per child from birth to the age of 18. Well, I have 2 of them virtually to that point and 4 more to follow. I don’t think I have spent $3 million on them. You are right about sunk costs. We had the same house with 1 or 6 kids although we did move shortly after number 6 was born. It got too crowded and my wife was going nuts.

    • 6 kids? You need to blog about your parenting techniques! I’m impressed that you managed to get stay in your home for so long. Great job on keeping your finances organized.

  6. As children get older, they cost more. Do they cost as much as some statistics? I don’t think so! There are many choices you can make that will add or reduce the cost along the way. Some of the areas are food, clothes, child care, activities and education.

    • I was just including housing to compare our expenses with the USDA’s estimate. As time progresses we’ll go ahead and include updates.

  7. Many couples purchase their housing with children in mind, if they are hoping to have kids. So instead of buying a one bedroom apartment near nightlife and restaurants, many couples, in anticipation of children, buy a multi-bedroom house with a yard (or a condo with child friendly amenities) in a good school district. These often, but not always, cost more and often increase commuting, which ups your car expenses.

  8. I wish health care costs were $963.

    Our baby is due in a couple of weeks. It will cost me just shy of $250 per paycheck to add him to my insurance โ€” plus copays and a $1200 deductible. So we’ll hit $1000 well before 2012, with a baby born in October ๐Ÿ™

    I’m planning to breastfeed and we’re cloth diapering. I was able to get some great deals on used diapers and covers on Craigslist โ€” we’re set for the first 2-5 months (depending on how big he is and how fast he grows) on $105 without needing to do prefolds/pins.

  9. Just to add, saving for the kid’s education is a priority to some. $2500/year + $500grant is what we get so that’s an added cost of approx $200/m, but well worth it in my opinion.

    • I had wrote about savings for kids’ college funds – I do agree starting sooner rather than later is easier on family finances.

  10. We have six kids. Remember the numbers aren’t just talking about infants. Have you tried feeding a herd of elephants (ie 3-teenagers). Food bill: $1400/mo.

    Health Insurance is one of the biggest costs. Think boys and knives. And stupid older boys and alcohol. Emergency room plus MRI — Our cost: $880.

    You may or may not need a new car. If you had a sedan of some sort, you probably won’t for a while. But, if you had coupe, getting car seats in-and-out of the back gets old. When we married my wife had an MX6 that I got to drive. After we started having Kids, MX6 was traded in for a mini-van. :O) I believe kids cause more wear and tear. You’ll be driving more. Preschool, sports, dance recitals, etc.

    Home. Again depending on your family size you may or may not need to upgrade. But, I think most people do. Once you have a family, you often decide a different neighborhood would be more conducive to family living. You may have made this choice before kids, with kids in mind, but then the extra cost is still there.

    Clothes — hand me downs work great when kids are younger, but as they get older, it just doesn’t. Ross, TJ Maxx can be great. Also giving kids a budget and letting them decide how far to make their money go is great. Three shirts from Ross or one from Tilly’s – you decide.

    Life — There are many times when you can be frugal. But life happens. As kids get older, it happens more. This can mean more nights out (everyone is too tired too cook), Johnny went off a jump and broke his army, Janna did a spinning jump kick and hit the lamp. :O)

    My experience tells me, the estimates are pretty darn close. Of course estimates are based on averages. Some go above, some go below. While you are young and full of energy keep the expenses down. Save up. Life is coming.

    And for the record, I don’t want to be a total bummer. You can’t put a price on the joys that children bring. The hugs as you enter the door. The kisses at night. The family prayer time where the biggest concern is are there potties in heaven. The scrambled words, thoughts, and actions. No life with kids is worth any price. :O)

    • The calculatoe I linked to allowed you to include your child(ren)’s age to get a better estimate. Since our baby is less than a year old, my review is on that particular estimate.

      Thanks for sharing the tips on saving on clothes!

  11. I’m almost convinced it’d be okay to have a child now haha but I know it’s still not wise to do right now. But it’s comforting to know it’s not AS expensive as the media tries to make it seem. There’s lots of ways to skimp on the expenses (like you mentioned, breast feeding, staying where you live, cloth diapers, etc). That explains how so many of my peers are surviving with their kids.

    • Glad you’re feeling a bit more positive about kids ๐Ÿ™‚

      I always recommend increasing your savings buffer if you plan on having children. You have no idea what can happen and until you get adjusted to your monthly budget with the addition to your family.

  12. The media is adding up all the years from birth to age 18. Newborns are cheap. Toddlers are still OK. The older children get, the more expensive they get. I’d like to see you come back every year and update us on the costs.

    Not everyone can breastfeed. There are medical reasons why some cannot. Also, every child is different. If you have a child that has even slight medical issues such as acid reflux (pretty common), you will need to add in the cost of doctor’s visits and medication.

    You can always hope for the best, but plan for the worst. I would hate for someone to read this post and expect rainbows and sunshine then be in a bind.

    • I find the calculators fascinating and plan on updating expenses here on the site.

      I understand not everyone can breastfeed. That’s why I mentioned formula -however asking around, my friends were also surprised by the high amount given. I found one that knew of a family that have to get a very particular brand of formula that was over $100/month. The rest took advantage of coupons and sales to keep their costs down.

      As you’ve noticed I share our personal experience to give some idea of our costs. As you rightfully point out, everyone has a different experience. Hopefully parents will check out other sites as well.

      I recommend Frugal Dad, Mom Plans, The Saved Quarter, and My Journey to Millions as some wonderful blogs that share their take on family and finances.

  13. I guess you are very lucky with many of your expenditures.

    I track down expenses on our child and published them. It comes to at least to $ 20 K a year.
    And this is only child care & food + clothing.

    It does not get any cheaper (at least over last four years). As matter of fact, child is 30% of our expenditures.

    • I’m curious what part of the country do you live in? I’m trying to get an idea of how much location factors in to the expenses of raising kids.

  14. Very interesting – thanks for the analysis and the link to the calculator.

    Our daughter was born in January. Coming up on her first birthday it’s interesting to see how our expenses match up. Housing? We bought the 3 bedroom years ago, knowing we wanted kids, I can’t guess off the top of my head how much that has cost us over the years. Food… I think we order takeout about as often as we used to eat out, because we’re both too pooped to cook. She’s still breastfeeding , we did jarred food for a few months, and now she’s eating table foods, so all in all I think we come in under estimate. Oh wait, unless this category includes breastpumps, parts, bottles, freezer bags, etc. Then we’re getting close. Transportation is funny, because I saved 8 weeks of commuting expenses while I was on maternity leave, but we almost bought a new car because the infant seat was such a tight fit in my Scion xA. Thankfully convertible seats are more upright and I’ll be able t keep my car a few more years as planned. We went with high end convertible seats though, bringing the Transportation cost back up. Clothing includes diapers, and thanks to Amazon Mom we’re only paying $60/month for Pampers Sensitive and wipes. We’re also lucky to have generous friends and family who gave us new clothes, and friends giving us hand-me-downs. Child care… wow, the estimate is about half of what we’re paying for 5 day/week full day.

    Not listed: the lost pay due to maternity leave. I just sat down today and figured out I took home $6300 less this year than I would have if I had worked all year. Ouch.

  15. Thank You writing this. I have always heard that kids are SO expensive to raise and I found it hard to believe but SO many people say it I thought I would look idiotic if I disagreed. I personally dont have any children, However for the past year I have been helping to raise my boyfriends daughter half of the time. Although she is only with us HALF (because he as joint custody) the time I couldn’t even find a way to justify a quarter of the costs they say children create. These numbers they come up with are ridiculous and the most of the money would have been spent regardless of whether children were in the equation.