Money Smarts Blog

The Hidden Costs of Having a Baby

Apr 6, 2020 || Jamie Miller

pregnant couple heart on belly

We all know kids aren’t cheap, and most parents-to-be try to save for those added expenses during pregnancy, if not before. According to the USDA, a middle-class, two-parent household in the US will spend on average $233,610 from birth to age 17 – not including education. But where does that money go, and what should you start saving for now? Below we list some of the lesser considered expenses that you might want to factor into your future family budget.

Labor and Delivery

You bought diapers, baby clothes and receiving blankets, and the car seat is set up. You’re ready for the big day. But have you thought about the cost of delivering? Unfortunately, in the US, actually having the baby isn’t free. The first cost you need to think about is labor and delivery. According to this Business Insider article, the average cost of a vaginal birth with insurance in Illinois is $8,329.52. The average cost of C-section with insurance is $11,999.74. Keep in mind these are average costs and will vary depending on where you live, but they’re a good place to start. Have a conversation with your healthcare and insurance providers to get a better idea of what your cost will be in every possible scenario. Then, start saving accordingly. You’ll have immense peace of mind on the day you meet your new bundle of joy.

Parental Leave

Not all parental leave policies are created equal. Under the Family and Medical Leave Act (FMLA), US employers must provide up to 12 weeks of job-protected – but unpaid – leave for employees who have been with a company or organization (with more than 50 employees) for a year or longer and have worked at least 1,250 hours during that time. Yes, it’s that specific, and, no, they don’t have to pay you. Many companies have adopted their own paid policies or require employees to use their paid time off or sick time as part of the package. It’s important to speak with your employer about the specifics of your company’s policy and to plan accordingly. 

Health Insurance

When you add your child to your health insurance policy, the cost will, of course, go up. However, it’s also important to consider the costs of the additional doctor visits and medications. Not to mention the sick days you might need to take from work to care for your little one, especially if you had to put your sick time toward your parental leave. Kids get sick. A lot. And these costs can add up quickly, so it’s a good idea to start saving now.


Many future moms plan to breastfeed. Some don’t. Some will breastfeed and supplement with formula, and others will try to breastfeed, but it won’t work out. Whatever your plan, it’s a good idea to add formula to your budget, just in case. Formula varies in cost depending on the brand and quantity you buy, and the amount you need varies per baby. In short, it’s hard to account for the costs, especially when you’re not sure you’ll be using it. But it’s important to factor this line item into the budget, just in case. Additionally, if breastfeeding is important to you, you might want to price out a few lactation consultants, as well.


Although some parents are fortunate to have family or friends who are willing to babysit for free, not everyone is so lucky. My husband and I don’t live near family, and even if we did, all of the grandparents still work and wouldn’t be able to offer their babysitting services during the day. So, we started looking into daycare and nanny options. I knew childcare came with a hefty price tag, but, if I’m being honest, I really had no idea how hefty it would be. Whether you need full-time, part-time or occasional childcare, start researching your options before your little one arrives, and save accordingly.

Pro tip: start your research in the first trimester, many daycares have waiting lists that are months long.

Creating a Will

Having a will is one of those things that is necessary but unpleasant to think about. However, it’s even more unpleasant to think about the worst happening before you’ve taken the legal actions necessary to ensure your child is taken care of. You might need to pay for lawyer’s fees to create or update your will. Alternatively, if you want something fairly straight forward, you can look into less expensive online alternatives, such as Trust & Will, which has an A rating from the Better Business Bureau. Look into your options, and make a line item in your budget for this important step in taking care of your family.


Although it might feel unnecessary to start saving for something 18 years down the road, the cost of college is only rising, and it’s not the only education cost you should consider. Some parents choose to send their children to private elementary, middle and high schools. Even if you go the public-school route, tutors, before-and-after school care, extracurricular activities, field trips and the like can cost extra. Get a jump start on these expenses now to afford your child every opportunity.

Now that you have some insight into the hidden costs of having a baby, start updating your budget. Having a plan now will only give you peace of mind in the future (near and far).

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