Having a baby? Here’s something for you to consider: A baby’s first year could cost parents up to $16,000, according to a new study.
The study by BabyCenter, which calculated costs based on a variety of items needed for a baby, from childcare and formula to diapers and bibs and clothing, found that a baby’s first year could cost parents on average $15,775.
The biggest expense during a baby’s first year is childcare, which roughly costs about $6,500. BabyCenter also estimated the cost of childcare specifically based on a survey of 307 parents who use paid childcare.
“Recession fears and concerns about financial stability also worried 52% of parents. And these fears led 25% of parents surveyed to say they’re having fewer children. ”
Other big expenses include the cost of feeding a baby (formula, solid foods, et cetera), as well as baby gear, such as strollers, car seats, and such.
That doesn’t take into account the cost of a bigger house. Many families decide to move to a bigger home, in anticipation or after the birth of their child. That adds to the monthly mortgage payment. The typical U.S. home value fell by $366 in July, and is now $357,107, as measured by the Zillow
Home Value Index.
All of this is taking its toll on would-be parents. In fact, the U.S. birth rate fell 4% in 2020, the largest single-year decline in nearly 50 years, according to a Centers for Disease Control and Prevention report.
And as the Associated Press reported this week, members of Millennials and Generation Z are going public with their reluctance to have children, citing student debt, financial pressures and even Climate Change as factors.
And as prices of goods and services required to take care of a child rise, concerns about cost also weigh heavier on parents’ minds.
According to a separate survey of 1,515 parents by BabyCenter, these baby expenses on average take up 27% of parents’ total income. Three in four parents admitted that they are stressed about family finances.
About a quarter of parents surveyed said that they’re holding on to debt, or postponing or even abandoning plans to pay off debt because of baby-related expenses.
“About a quarter of parents surveyed said that they’re holding on to debt, or postponing or even abandoning plans to pay off debt because of baby-related expenses.”
Moms who decide to stay at home to take care of their little one take a big financial hit: Unpaid leave costs moms $6,643 in income, on average.
Inflation only added to parents’ worries over costs: 54% said that they were worried about managing daily expenses due to inflation, and over half of parents also worried about the cost of raising a child.
Recession fears and concerns about financial stability also worried 52% of parents.
And — echoing the CDC data on U.S. births — these fears led 25% of parents surveyed to say they’re having fewer children. Another 25% said they’ve decided to pause or delay adding children to their family for the reasons above.
Got thoughts on the cost of parenting? Write to MarketWatch reporter Aarthi Swaminathan at email@example.com