Parents

Budgeting for baby: What does it cost?

Cookie magazine talks to financial experts — who also happen to be moms — about what parenthood really costs, and what you can do to prepare for your first child. Here's what we found:

Gauging the costs
If you're considering having your first baby but aren't sure — given the state of the global economy and the state of your Visa balance — that it makes financial sense right now, you might have already Googled "the cost of a child." Like almost any Internet search, this can yield some pretty terrifying information. According to the U.S. Department of Agriculture, families who make more than $74,900 a year will spend an average of $289,380 per child over 18 years (this does not take into account college savings). In one year, the average parents spend $4,300 in childcare, an additional $1,525 in food, and $2,900 on a bigger home.

The real costs, of course, vary widely by region. The most accurate way to figure out what you'll spend, says Jean Chatzky, TODAY financial editor and author of six books on personal finance, is to "ask your best friend who has a baby to tell you what she spends." If talking money feels beyond the bounds of your friendship, ask questions on online message boards for local parents, where under anonymity, people are often more than willing to talk about what they spend for childcare, doctor's visits, and so on.

Aside from calculating the immediate costs of a baby, you also need to start thinking about —and saving for — the lifestyle changes being a parent will entail. Do you need to get a more child-friendly car? A bigger home? And will one of you want to become a stay-at-home parent?

Pre-baby financial plan of attack
If you've never been a budgeter, now's the time for a financial reckoning. Experts recommend that parents-to-be and new parents dedicate themselves to whittling down their credit-card debt (ideally — and here's some tough love — to zero), while at the same time, building an emergencies-only savings account of six to nine months' worth of expenses. Do whatever it takes to meet this goal: Spend on a cash-only basis and write down every expense — or use a free online spending tracker like or — so you have a visceral idea of where your money goes. And be prepared to sacrifice. "If you want to prioritize the expense of a child, well, you may not need as many minutes on your cell phone and you may not need as many meals in a restaurant," says Chatzky. "And by the way, you're not going to be going to restaurants much once you have a child, anyway!"

And if one of you plans to leave the workforce to become a stay-at-home parent, says Laura Rowley, Yahoo! Finance editor and author of "Money & Happiness," "You should run last year's tax returns through tax software, eliminating the one income. Then you will know exactly what you're taking home." Another good strategy: Whether you're considering getting pregnant, or already expecting, do a trial run, living on just one income for at least a month "Not only will you see if you can do it," says Chatzky, "but then you bank the other salary for the pregnancy and get a nice, big, fat emergency cushion to start with."

There are averages, then there’s you
Once you have a sense of the costs of a child, it's important to realize you can always budget down. "Babies are actually pretty cheap," says Liz Pulliam Weston, MSN Money columnist and author of "Easy Money." "We spend a lot on them for us." The easiest costs to control are the start-up ones (the crib, stroller, clothes, etc.). Check out "Baby Bargains" for tips on which children's items you can go cheap on or skip altogether — and advice on how to find the best prices on kids' things, and handmedowns.com for city-by-city listings of secondhand gear, furniture and clothing.

Any chance we’re overthinking this?
As Alec Baldwin (okay, not exactly the model parent, but bear with us) said on "Larry King Live" awhile back, "I came from one of the last generations where people had a big family on faith. They were going to find the money and they were going to find a way to raise all their kids."

Even financial experts don't suggest that money should be the deciding factor in starting a family. "You can definitely overthink it, and you don't want to make decisions about bringing a life into the world based completely on finances," says Rowley. "But you do want to have a mature handle on what you're doing with your money."

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