Sunday, October 23, 2016

What is the one year cost of ownership for a baby? We've tracked several expenses that are directly attributable to the baby and aggregated them here.

What Expenses are Included?

  • Medical - cost of delivery/c-section + cost of hospital stay (including NICU) + all associated trips to doctors' offices (all are what we owed after insurance) + cost of his insurance
  • Diapers - cost of diapers + cost of wet wipes used in diaper changes
  • Formula - cost of baby formula
  • Baby Safety - cost of car seats + cost of rug and pad for baby to lie on for tummy time, play time, etc.
  • Daycare - cost of daycare
  • Lost Wages - wages lost from mother's FMLA + cost of mother's benefits during FMLA - disability insurance payout - wages gained by cashing in vacation and sick leave
  • Nursery - cost to set up the nursery
  • Other Food - at around six months he started eating other foods, so this includes vegetable purees, foods we prepared for him, etc.
Note that this leaves out many expenses that we either did not track separately and/or could not directly attribute to the baby. Examples of these are baby clothes, bottle expenses, and utilities. This means that the cost estimates that follow are likely underestimates.

If you would like to see these same costs at three months, they can be found here.  The six month costs can be found here.


The 12 month totals for each category are listed in the table below:

The expenses listed above are plotted vs. time as they accumulated in the interactive (non-mobile) chart below:

What About Taxes?
As mentioned in this post, the baby saved us $1150 on our 2015 taxes. Our 2016 taxes should show the same savings + a write-off of $5000 of income for daycare expenses through an FSA. Again assuming a 25% tax bracket, that will net us $1250, for a total savings of $2400 on taxes.

It's become even more obvious at this point that daycare is by far the biggest expense and will continue to grow. It more than a third of the ~$25,000 first year cost. There's no real mitigation for this one either as one of us quitting our job would be far more expensive than daycare (easily an order of magnitude over our professional careers) and we're at one of the least expensive daycares in the area.

The good thing about that I guess is that the other expenses don't seem so bad by comparison. It's not stressful at all to spend slightly more on diapers we want, more bottles for convenience, etc. as saving $2 a week here and there really doesn't matter anymore when faced with the cost of daycare.

I don't think my lessons learned have changed at all since the six month post so I'll write it again here:
  • Find a job that pays you for parental leave or has really good short-term disability coverage
  • Find an insurance provider that has good coverage for pregnancy expenses
  • Find a cheap daycare (note that you do get what you pay for to some degree so be careful with this)
  • Get second-hand nursery items


  1. Well, it's the first time I meet an article which considers baby as an investment or saving :) But, anyway, it was really useful to read such a comprehensive financial report.

    Sophie van der Linden

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