If you are planning to start a family, you may be wondering about your finances and whether or not you’re ready to have a baby. Diapers, baby gear, clothing, toys and unexpected costs that come along with having a baby can be overwhelming. Some couples try to save money to prepare for the birth of a child, but how much should you save?
This is a huge question and really depends on the time frame as well as what you choose to cover with your “baby savings.” There are a few things you should take into consideration when you start your baby fund. Will you lose any wages from the birth of your child? Will you be a stay-at-home parent or will you have to pay for childcare?
Hospital Bill: $10,000-$12,000
People with insurance will usually have most of their hospital bill for the birth of their child paid for. Most couples with insurance only pay a few thousand dollars out-of-pocket. Those without insurance pay up to a $12,000 hospital bill. You will also need to save for other medical bills like OB/GYN appointments and doctor appointments for the new baby if you do not have insurance or you have a high deductible.
Supplies: About $8,700
When it comes to nursery supplies, food and milk, there are some things you can’t do without when it comes to your baby. However, it is difficult to decide what you can skip. Here are a few areas that are must-haves, but there may be a few ways to cut down the cost.
Formula and Food – $2,000 – You may be able to cut this cost down if you breastfeed for as long as possible.
Nursery – $2,000 – Setting up a nursery can be a pricey venture. Before you buy the best and most expensive of everything, do some research and prioritize when spending on furniture for your nursery. Invest money in things that you think you could pass down through generations, like a rocking chair, and not on things like a changing table.
Baby Gear – up to $2,700 – Strollers, play pens, carriers and other baby gear can get expensive. If you can, find two-in-one items. You will be able to get more use out of these items for your money.
Diapers – $1,000 – Diapers and bathroom supplies for babies can add up. One way you can save on these items is to buy them in bulk online. Diapers, baby oil, wipes and other items are things you will always need, so they will never go to waste. Buying online (check out Diapers.com) and in bulk will save tons of money.
Clothing – $1,000 – Clothing for your new baby can get pricey, but it doesn’t need to be. You can buy items off-season and you can also buy bulk outfits (multiples). Another great way to save on clothing is to scout out secondhand stores or yard sales for baby clothes.
Other Expenses: $24,000
Will you be taking a maternity leave? If so, is it paid? If not, you will have to budget and save money to make up for the lost hours at work. Most people recommend setting aside about $8,400 if you’ll be missing work for an unpaid maternity leave. Once you go back to work, you will likely have to get childcare, which will cost approximately $9,000 a year.
You may also need new insurance for your little one and will want to get a will prepared to protect them if something were to happen to you.
The grand total for saving for a baby would come out to about $43,000. Not many people are saving that much. However, if you are thinking about starting a family, saving should be something you are putting some thought into. Many couples use automated savings transfers or deposits to keep them on track for saving for a life together.
No matter what stage of life you are in, be sure to continue to save money — you never know when you may need it. This calculator can help you decide how much to save for a baby.
Photo: Flickr: mulan