If prospective parents were to tally the cost of having a baby before they conceived, the U.S. population would undoubtedly suffer a serious decline. Just consider: According to a 2010 USDA report, the average middle-income family will spend roughly $12,000 on child-related expenses in their baby’s first year of life. By age two, parents are up to more than $12,500 per year.
Parents can count on spending close to $50 per week ($2,448 per year) on diapers, formula and baby food alone. Then toss in such big-ticket items as furniture, equipment, clothes, childcare if you’re returning to work, medical expenses, and -- well, you get the idea.
“New parents learn early on that everything costs much more than they anticipated,” says Barbara Hetzer, author of How Can I Ever Afford Children? Money Skills for New and Experienced Parents. “And the expenses keep getting bigger as you go along.”
For some new parents, these expenses come as a double whammy. If both parents were working before the baby’s birth, “when you have a baby, if one or both of you take at least some time off, your income goes down at the same time your costs go up,” says Alan Fields, coauthor of the book Baby Bargains.
But having a newborn doesn’t have to become a financial crisis. If you get a realistic grip on the expenses you’re likely to face, do some advance planning, and learn the art of the baby deal, you should be able to save a bundle on your bundle of joy. Here’s how.