Saturday, January 6, 2018

How Expensive Is A Baby? - 2 Year Update

Posted by theboat On January 06, 2018 10 comments
What is the two-year cost of ownership for a baby?

What expenses are included?

As I've noted in other posts, it's increasingly difficult to track detailed costs for things like food simply because he shares our meals. Thus, I will have to use estimates for it, and I'm going to estimate low overall here. That being said, the categories I'm including in the second year are:

  • Medical - cost of doctor's visits, surgeries, insurance, and drugs; only major thing in year 2 (aside from insurance) was getting tubes in his ears due to something like 7 ear infections in 4 months
  • Diapers - cost of diapers and wipes used for diaper changes
  • Safety - cost of baby-proofing and car seats
  • Travel - cost of plane tickets (he's two...we traveled right after his 2nd birthday and bought tickets before it, so I'm including that); I forgot to track which tourist things charged us for him so that is not included
  • Daycare - cost of daycare
  • Food - cost of his food; hard to accurately track in his second year so I used the increase in food costs per month in the second year vs the previous two
It is again important to know that this ignores a large number of huge expenses that I don't know how to estimate well, including but not limited to:
  • Higher housing costs due to needing a larger house for the third person (no more 1 BR apartments)
  • Higher utility costs for the larger house and the additional person
  • His clothing costs (I didn't think to track those)
  • Lower wages due to selecting jobs that are flexible enough for raising a child
  • Saving for his future/education

Total cost

Combining all of those, I end up with estimated costs of:

Comparing with the first year, that means the added cost for the second year is:

Putting this into an approximate daily expense plot, I get:

What about tax savings?

For 2015, we gained a $4000 personal exemption and $150 child tax credit. For 2016, we gained a $5000 FSA exemption for daycare, $4000 personal exemption, and made too much for the child tax credit. Thus, over this time period, we saved ~$3400 total in taxes. We will likely save an additional $2250 for 2017.

Grand total

Adding this all together, the baby cost ~$37,000 using a very low estimate for the cost. Kids are expensive. It is important to note that my wife and I both work upper-middle class jobs in Austin, TX.


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  2. And certain people wonder why the birth rate is falling...

  3. This is one of the best blogs I've seen in a long time. We're planning a family and its so good to find some actual data & hard information on how life will change financially. Looking forward to reading more posts!

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  5. Hmmm... how long until a positive return on investment?