The decision to have or adopt a child is one of the most monumental life choices that can be made.
For the next two decades or so, that child is going to turn to you, and perhaps your partner, for food, healthcare, education, entertainment, and simply providing a warm bed and a dry roof.
With all of these responsibilities comes a common denominator: money. Raising another human being until he or she is financially independent is essentially signing on to double everything that you already pay for, and possibly then some, if you consider the cost of a college education.
But how much does raising a child really cost?
Through surveying 1,000 parents with a child that is at least one years old but no older than three, we were able to uncover some pretty eye-opening statistics when it came to the cost of raising a single baby during the first year of his or her life.
Observations & Analysis
To see the complete survey results, scroll to the bottom of this page or click here.
Year One Costs an Average of $13,186, Representing a Significant Amount of Most Household Incomes
According to our 1,000 respondents, the average cost of raising a child during the first year cost $13,186, while the median cost was $6,000. A 2010 report from the USDA wrote that the average household will spend $12,000 during their baby’s first year of life.
Adjusting for inflation nine years down the road and it would be reasonable to project that the first year cost of raising a child is closer to our $13,186 figure than it is to the 2010 figure of $12,000. As an aside, more recent USDA data estimates that raising a child through the age of 17 costs $233,610, or $13,741 annually.
Now, it is time to take a deeper dive into LendEDU’s own figures from our survey and find out just how that $13,186 is being spent and what kind of toll it is taking on parents’ bank accounts.
As the above pie chart depicts, things like toys, diapers, and strollers collectively turned out to the best most expensive category, representing 30 percent of the total cost, or $3,956.
This is something that Jacqueline Gilchrist, a mother of a 13-month-old daughter, can attest to:
The most expensive cost for my daughter during her first year was the stroller, which was over $700. The second most expensive cost was diapers. We used disposables. Even with price matching and targeting sales, the diapers’ cost was well over $450 for the year.
Jacqueline Gilchrist, Mother of 13-month-old daughter, Creator of MomMoneyMap.com
Representing 28 percent of the average total expenditure or $3,692, food came in as the second most costly category. Healthcare and childcare accounted for 17 percent and 13 percent of the total expenditure respectively, while miscellaneous expenses accounted for the final 12 percent.
No matter how the total cost is broken down to get to $13,186, it does not change the fact that the figure is a very serious financial commitment over the course of just one year.
So, how big of a chunk did the average cost of raising a newborn through year one take from the average respondent’s annual household income?
For a quarter of poll participants, their first year expenditures for their children represented between 21 to 30 percent of their annual incomes. 13 percent of survey takers had to divert somewhere between 31 to 40 percent of their take home pay, while 8 percent had to expend up to 50 percent. Another 8 percent spent more than half of their yearly incomes to raise their babies through year one.
The financial strain taken on by parents in the first year of their child’s life is clearly evident, but just imagine the ever-present monetary obligation that comes with roughly two decades of child-rearing? This is why it is crucial for parents to plan and budget way ahead of parenthood.
Budgeting Was Common and Savings Were High, But It Still Wasn’t Enough
We wanted to evaluate if the parents that took part in this survey were blindsided by how much their children would actually cost during the first year and if they were prepared to meet all challenges.
As previously mentioned, our survey data revealed that the actual first year cost of raising a newborn in year one is $13,186, on average. As it turns out, our respondents were not too far off in predicting how much money they would spend raising their baby during initial year; the average parent expected to spend $9,371 on their newborn, meaning they only missed the mark by $3,815.
Not too shabby of an estimation for something that is as unpredictable as raising a newborn child, where any day something could happen causing unplanned expenses. This is something that Jacqueline Gilchrist had experienced.
Even though I created a spreadsheet with all of the possible costs for my baby’s first year, I still underestimated. It’s difficult to assess the amount of diapers your baby’s going to use until she needs it.
Jacqueline Gilchrist, Mother of 13-month-old daughter, Creator of MomMoneyMap.com
58 percent of survey participants indicated that they, or their partners and themselves, began saving money ahead of having their child to prepare for the associated costs, while 42 percent did not do any budgeting.
Considering the significant expenses that come with bringing a baby through his or her first year of life, 42 percent of parents not saving in preparation seems to be too high. Amongst those that did save, 52 percent of them indicated that they still did not have enough to cover all costs, and they saved an average of $9,331!
The point to be taken? Expected parents should save aggressively, and even when they think they have enough put away, they should go the extra mile and save a lot more.
What about those that are planning on having a child but have not done any saving whatsoever like 42 percent of our survey participants? Its probably a good idea to start because even something is better than nothing, and it may help just a bit when the baby bills start piling up.
Evaluating the Impact of Newborn Financial Obligations
To conclude this survey, a series of questions were proposed to gauge the impact that the financial obligation of nurturing a baby through his or her first year of life has.
On More Children
Did the steep monetary price that comes with raising a newborn baby deter parents from wanting to have more kids? Forget whether or not they wanted more kids, was it simply impossible to afford another $13,186 so soon after just spending that much?
A combined 53 percent of parents indicated that the expenses of taking care of their newborn baby during year one have deterred them from having more children to some degree. Specifically, 27 percent said they need to wait a few years, while 26 percent simply stated they are not having any more children.
By comparison, a combined 37 percent responded that the financial commitment has not deterred them, while 10 percent opted not to say how they felt.
Spacing out when you have or adopt multiple children seems to be common practice simply because the financial pressure is too high for most. Since respondents are still barely removed from that first year of raising their children, it would not be surprising to see more respondents swing towards having more children in the future.
On Debt
With the average cost of providing for a newborn baby being $13,186 during the first year, it was not unreasonable to assume that a decent amount of survey participants may have taken on debt to cover the costs.
Nearly a quarter of respondents, 24 percent, had to incur debt to afford the expenses associated with raising a child through year one, while 64 percent did not, and 12 percent did not say.
In terms of exactly how much debt was taken on, the average amount according to the respondents that did incur debt was $6,144, while the median was $3,000.
As Jacqueline Gilchrist noted, taking on debt to afford a baby is very realistic as many parents lose income due to parenting responsibilities that require 24/7 attention:
I’m on an 18-month maternity leave. With the decrease in household income over a long period, we have had to take on additional debt to manage costs. We’ve dipped into our home equity line of credit as it has a cheaper interest rate than using a credit card.
Jacqueline Gilchrist, Mother of 13-month-old daughter, Creator of MomMoneyMap.com
On Career Changes
Of all the things to be impacted by bringing a new life into the world, one would think that career changes are the most likely to be affected. Other than maternity or paternity leave, work schedules need to be flexed, location needs to be convenient, and pay needs to be increased to keep pace with the rising expenses.
So, which of these scenarios unfolded for some of our survey participants?
The plurality of parents, 31 percent, indicated that they, or their partner, had to ask for a more lenient work schedule, including working from home. Another 29 percent stated that they, or their partner, had to leave the working world entirely to become a stay-at-home parent, while 25 percent responding by saying that either they or their partner had to switch jobs to bump their pay up.
Ashley Patrick, a mother of a 16-month-old son, discussed how her career had to change after having a child:
I did change careers from being a police officer to working at home for myself. We decided that childcare was so expensive that it wasn’t worth my time to work. The cost between childcare, gas, and taxes, made it to I barely brought home any income.
Ashley Patrick, Mother of a 16-month-old son, Owner of BudgetsMadeEasy.com
On Relationships
Lastly, we sought to discover if the financial strain tied with raising a baby catalyzed any sort of change for those survey participants that had or raised their child with a partner during the first year.
Amongst the 83 percent of respondents that indicated they brought their child through year one, the plurality, 42 percent, responded by saying their relationship was not impacted.
Contrarily, 37 percent stated that their relationship with their partner got better, while 15 percent indicated their relationship was made worse.
It is encouraging that a relatively small percentage of respondents were negatively impacted in their relationship due to the monetary pressures of nurturing a child through his or her initial year. Raising a child is supposed to be one of the most rewarding experiences one can have, and while the financial stresses can compound rather quickly, the positives will almost always drowned out the negatives.
Complete Survey Results
(1) Within the first year of your child’s life, how much did you, or you and your partner, spend in raising your child, including housing, healthcare, food, childcare, etc.?
- The average amount spent in year one was $13,186
- The median amount spent in year one was $6,000
(2) What percentage of your annual household income did that first year cost of your child make up?
- 16 percent of respondents answered “0 to 10 percent”
- 30 percent of respondents answered “11 to 20 percent”
- 25 percent of respondents answered “21 to 30 percent”
- 13 percent of respondents answered “31 to 40 percent”
- 8 percent of respondents answered “41 to 50 percent”
- 8 percent of respondents answered “More than 50 percent”
(3) According to the first year cost for your child that you previously answered, what percentage of that cost went to childcare, including a nanny or daycare center?
- On average, 13 percent of the total first year cost went to childcare
- In monetary terms: $1,714
(4) According to the first year cost for your child that you previously answered, what percentage of that cost went to healthcare, including out of pocket and insurance costs?
- On average, 17 percent of the total first year cost went to healthcare
- In monetary terms: $2,242
(5) According to the first year cost for your child that you previously answered, what percentage of that cost went to food for your baby?
- On average, 28 percent of the total first year cost went to food
- In monetary terms: $3,692
(6) According to the first year cost for your child that you previously answered, what percentage of that cost went to things like toys, diapers, strollers, and clothes?
- On average, 30 percent of the total first year cost went to things like toys, diapers, strollers, and clothes
- In monetary terms: $3,956
(7) According to the first year cost for your child that you previously answered, what percentage of that cost went to miscellaneous costs?
- On average, 12 percent of the total first year cost went to miscellaneous costs
- In monetary terms: $1,582
(8) While planning for your child, how much did you, or you and your partner, expect to spend during the first year?
- The average amount expected to be spent was $9,371
- The median amount expected to be spent was $5,000
(9) While planning for your child, did you, or you and your partner, begin saving money in advance to cover the costs of the first year?
- 58 percent of respondents answered “Yes”
- 42 percent of respondents answered “No”
(10 — Asked only to whose who answered “A” to Q9) How much did you, or you and your partner, save to cover the costs of the first year?
- The average amount saved was $9,331
- The median amount saved was $3,000
(11 — Asked only to whose who answered “A” to Q9) Was the amount that you, or you and your partner, saved enough to cover the first year of child costs?
- 48 percent of respondents answered “Yes”
- 52 percent of respondents answered “No”
(12) After raising your child through the first year, have the costs from that year deterred you from having more children?
- 26 percent of respondents answered “Yes, I, or my partner and I, am/are not having anymore children”
- 27 percent of respondents answered “Yes, I, or my partner and I, need to wait at least a few years before having more children”
- 17 percent of respondents answered “No, I, or my partner and I, am/are trying to have more children already”
- 20 percent of respondents answered “No, I, or my partner and I, want to have more children at some point”
- 10 percent of respondents answered “I’d rather not say”
(13) Did you, or you and your partner, have to go into debt (credit card, personal loan, etc.) to cover the costs of raising your child during the first year?
- 24 percent of respondents answered “Yes”
- 64 percent of respondents answered “No”
- 12 percent of respondents answered “I’d rather not say”
(14 — Asked only to those who answered “A” to Q13) How much debt did you, or you and your partner, take on to cover the costs of raising your child during the first year?
- The average amount of debt taken on was $6,144
- The median amount of debt taken on was $3,000
(15) Did the first year of raising your child, impact you, or your partner’s, career decisions?
- 45 percent of respondents answered “Yes”
- 45 percent of respondents answered “No”
- 10 percent of respondents answered “I’d rather not say”
(16 — Asked only to those who answered “A” to Q15) How did the first year of raising your child impact you, or your partner’s, career decisions?
- 25 percent of respondents answered “My partner or I had to change jobs to increase take-home pay”
- 31 percent of respondents answered “My partner or I had to ask for a more flexible work schedule, including working from home”
- 9 percent of respondents answered “My partner or I had to become a part-time employee to create more time”
- 29 percent of respondents answered “My partner or I had to leave the workforce entirely to become a stay-at-home parent”
- 6 percent of respondents answered “Another way not listed”
(17) Which of the following financial regrets, if any, do you have in regards to preparing for the first year of raising your child?
- 19 percent of respondents answered “I wish I started/contributed more to my child’s college savings”
- 30 percent of respondents answered “I wish I started/contributed more to an emergency fund”
- 5 percent of respondents answered “I wish I purchased life insurance”
- 10 percent of respondents answered “I wish I started/contributed more to savings for my child’s childcare”
- 3 percent of respondents answered “I wish I started/contributed more to savings for my child’s healthcare”
- 6 percent of respondents answered “Another regret not listed”
- 27 percent of respondents answered “No regrets”
(18) Did you have or raise your child with a partner?
- 83 percent of respondents answered “Yes”
- 17 percent of respondents answered “No”
(19 — Asked only to those who answered “A” to Q17) Has the financial commitment associated with raising a child impacted your relationship with your partner?
- 15 percent of respondents answered “Yes, for worse”
- 37 percent of respondents answered “Yes, for better”
- 42 percent of respondents answered “No”
- 6 percent of respondents answered “I’d rather not say”
Financing Options to Help You Afford to Take Care of Your Newborn
If the data above tells us anything, it is that raising a newborn child through the first year can be quite expensive. Let’s take a look at some different financing strategies you can implement to help cover the costs.
Personal Loan
A personal loan is one way to afford the additional costs that come with raising a baby through year one. The process for getting a personal loan is fairly straightforward, and there are various types of personal loans, like online personal loans or personal loans from a local bank.
Plus, if you are raising your newborn with a partner, then you can also look into applying for a personal loan with a co-applicant to help you qualify.
Home Equity Loan or Line of Credit (HELOC)
If you own a home, then you have the ability to qualify for a home equity loan or home equity line of credit (HELOC) to access extra funds to pay for your child’s expenses.
If you do decide to go this financing route, remember that there are additional home equity loan closing costs and fees that you must account for when setting a budget.
Credit Card
Finally, a more traditional method of financing expenses having to do with your newborn baby would be through applying for and getting a credit card. Credit card interest rates will vary greatly depending on your financial situation, so just be sure to fully understand your card terms.
Methodology
All data that can be found within this report derives from an online survey commissioned by LendEDU and conducted online by online polling company Pollfish.
In total, 1,000 Americans were surveyed for this particular poll. Respondents were screened so that only those that were parents currently raising a child that is at least one year old but no older than three were surveyed. This subgroup was found using a screener question.
The survey was conducted over a two-day span, starting on February 11th, 2019 and ending on February 12th, 2019. All respondents were asked to answer all questions truthfully and to the best of their ability.
See more of LendEDU’s Research