Hidden Costs of Having a Baby

Ways to Save Before and After Your Bundle of Joy Arrives

If you are a new parent or about to become one, your already-strapped budget is in for a serious squeeze. Fortunately, there are ways you can cut some of the costs of having a baby by understanding what lies ahead and mapping out an action plan.

Saving is more important now than ever. Your baby will be a toddler before you know it and other costs—such as housing and education—grow as children do. The rule of thumb is to save 10 percent of your pay from each paycheck. It may not seem like a lot at the time, but it will add up quickly. For example, putting just $20 a week in a savings account amounts to $1,040 (or more, with interest) after a year.

Here are the biggest hidden costs of having a baby, and some steps you can take to manage them.

Health Care for Mom and Baby

Pregnant women focusing on her health

The costs:
Even if you’re healthy, you will incur a significant amount of prenatal care. Seeing a doctor during pregnancy can help you prevent or manage what later could become a more serious (and expensive) health issue.

Other costs include delivery, postpartum care, and baby exams, which—between scheduled checkups and sporadic illnesses—easily can add up to 10 or more visits during the first year.

What you can do:
If you have health insurance, find out if your employer offers a flexible spending account, which allows you to set aside pretax money from each paycheck to spend on health care. Also, research the details of your insurance plan to make sure you fully understand your out-of-pocket costs.

Pregnant moms and children who meet certain income guidelines can sign up for Medicaid. Some states also offer free insurance to pregnant women. If you are looking for a new insurance plan or government assistance, your best place to start is the Affordable Care Act Marketplace found at www.healthcare.gov.


Happy mother holding newborn baby in hospital

The costs:
Delivery is the biggest single cost of your pregnancy, particularly if you give birth in a hospital, like more than 98 percent of women do. The overall delivery cost includes fees for the facility, the doctors’ time, medications, lab tests, and even some unexpected items—such as a toothbrush.

Costs vary depending on what type of delivery you have. Among parents with private insurance plans, the average out-of-pocket cost was $2,244 for a vaginal birth and $2,669 for a caesarian section, according to a 2013 study by Truven Health Analytics. (Medicaid covers 98 percent to 99 percent of total fees.)

What you can do:
If you choose to deliver your baby in the hospital, avoid getting nickel-and-dimed by bringing your own supplies, such as ibuprofen and toiletries. As an alternative to the hospital, you might consider hiring a midwife. Although the medical community recommends hospital births for high-risk pregnancies, many families deliver their babies with help from midwives, either in a birthing center or in the parents’ home, which usually is more affordable.

In 2011, the facility fee in a hospital for a vaginal birth without complications averaged more than three times the cost of the same type of delivery in a birthing center, according to data collected by the U.S. Department of Health and Human Services.

The Affordable Care Act now requires Medicaid to cover birthing center births and fees charged by state-recognized doctors, nurses, and midwives, explains Carol Sakala, director of Childbirth Connection Programs. Insurance coverage of home births is inconsistent, she says, but “sometimes perseverance (with your insurer) can turn a ‘no’ into a ‘yes.’”

Call providers to compare pricing and coverage for various birth scenarios, as well as related services such as breast-feeding and parenting classes. Then, pick the option that best suits your needs and your budget.

The Cost of Not Working

Pregnant women doing office work

The costs:
You probably realize you’ll have to take off a significant amount of time after the birth of your baby. However, as your baby grows and gets sick—with common ailments such as conjunctivitis (pinkeye) or an ear infection—you will have to take unplanned leave to help your child get better.

If your employer has 50 or more employees and you have worked in your job at least a year, you likely qualify for 12 weeks of leave under the Family and Medical Leave Act. Unfortunately, many employers don’t offer this as paid leave, so you lose out on salary or hourly wages during that time. Keep in mind that some states and cities require employers to provide hourly workers with some paid sick time—check with your local government about your state’s laws.

What you can do:
Ask your employer in advance about paid leave and sick policies. If you believe you can do your job at home or with a more flexible schedule, propose a solution in writing to your boss. It doesn’t hurt to try to find a compromise that fits your lifestyle and satisfies your employer’s needs.

Remember that you can never be too prepared. Rather than waiting until there is a problem, discuss backup child care plans with family and friends in the case of unexpected illness. You also may want to look for a pediatrician who offers extended hours to accommodate working parents. Know what your options are for after-hours care (for example, a pediatric or urgent-care clinic open late) rather than relying solely on the hospital emergency room, which can be extremely expensive.

Child Care

Toddler boy playing in daycare environment

The costs:
Unless you plan to have a family member watch your baby, you may be in for a bit of sticker shock. Annual full-time care in a center ranges from an average of $4,863 per year in Mississippi to $16,430 in Massachusetts, according to a 2013 report by Child Care Aware of America. Full-time home-based day care averages from $3,930 in Mississippi to $11,046 in New York.

What you can do:
Consider forming a babysitting co-op, in which several parents take turns watching the children each day. Also, check whether you qualify for assistance through the federal Child Care and Development Fund.

If you hire outside care, identify backups, such as a family member or friend, to watch your baby in case your regular provider cancels at the last minute.

The cost of child care can feel overwhelming, but there is some good news. Research shows that quality care enhances early education, which can pay off in your child’s academic performance years later.

Some employers offer a dependent care flexible spending account (FSA), which allows you to put aside pretax money for child care. If your employer doesn’t offer this type of plan, there are several tax credits to help offset child care, including the dependent care tax credit (up to $3,000 per child), child tax credit, earned income tax credit, and adoption tax credit.


Jars of baby food

The costs:
If you’re pregnant, it’s important to eat healthy now more than ever, but be aware that healthy eating can drive up your grocery bill. Then comes baby: Formula can cost upwards of $100 per month, and solid foods cost nearly as much.

What you can do:
Breast-feeding through the first year, when possible, can save you hundreds of dollars. If you go the formula route, look for discounts on manufacturers’ websites and consider joining a warehouse club, such as Costco or Sam’s Club (and pick up some diapers while you’re there). The Affordable Care Act now requires most insurers to provide a free breast pump to new moms, which saves hundreds up front and can help encourage breast-feeding while working.

When your baby is ready for solids, consider making your own. Homemade baby food is roughly half the price of jarred baby food. The catch is that preparing the food takes time.

Some pregnant and postpartum moms are eligible for the Women, Infants, and Children (WIC) program, which helps educate moms on nutrition and breast-feeding. WIC also provides breast-feeding supplies and vouchers for formula and other foods, redeemable at most major grocers.

Baby Gear

Baby's bedroom with crib

The costs:
A crib, a car seat, a high chair, and diapers cost big bucks. Then there are the clothes, shoes, toys, and books—plus items you didn’t even know about, such as swaddle sacks and a nasal aspirator.

What you can do:
A baby shower is a great first step. Ask other parents you trust to help you compile a registry. Then put your own money toward safety items, such as a car seat, or big needs, such as a mattress.

You can buy almost everything (other than diapers) at secondhand and kids’ consignment stores or online. Join a Facebook group or blogging community in your area where moms post items for sale or giveaway, and watch community sites such as Craigslist for deals. (However, be warned that you shouldn’t purchase some items, such as car seats, secondhand because they expire and you won’t know if they have been damaged in an accident.)

A new outfit easily can cost $30, only to have your baby outgrow it in a month. Secondhand and hand-me-down clothes often look brand-new and cost way less. You can always donate what you don’t use. And you might consider skipping the shoes (in favor of socks or booties) until your baby is close to walking.

To cut down on toy costs, look for safe items around the house, such as a shiny soup ladles or whisks. When you do buy, choose toys that will hold your child’s interest for years to come, such as blocks, and visit the local library for books.

Women, Infants, and Children (WIC) Program

Mother with young baby

Having a baby can be overwhelming, particularly on little or no income. Fortunately, dozens of organizations are available to help in specific areas, including health care, food resources, housing, and job training.

The Women, Infants, and Children (WIC) program is a good starting point. Call or search online to apply and make an appointment. Before you go, you’ll need to collect some required paperwork, including proof of your income and household size.

Most WIC offices offer maternity care in clinics run by state health departments or universities and can refer women to other services such as workforce centers. When you visit the office, a WIC counselor will assess if you meet the program’s requirements.

Moms who qualify for WIC receive ongoing nutrition education and breast-feeding help, explains Sandra Jones, a registered dietitian and the state breast-feeding coordinator for the Arkansas WIC program.

“We also see if there are any safety concerns or abuse issues, if the (child’s) immunizations are up-to-date, and if they have a medical care provider,” says Jones.

Qualifying mothers receive vouchers to cover specific food items (including milk, eggs, cereal, and canned vegetables), that can be redeemed at most major grocers. WIC provides support and classes throughout pregnancy and postpartum as well.


For general help and information, you can call United Way 2-1-1 (dial 2-1-1 from any phone, or find your local chapter online) or click on the links below: