Most parents know that having a child is expensive. Fewer know just how expensive — or where the costs actually land.
A hospital bill for childbirth alone can run quite high. Births cost an average of $18,865, although the cost varies widely depending on delivery type, insurance coverage, and hospital.¹ That figure doesn't include prenatal care, which adds to the total before the baby arrives.
Once a child is home, expenses multiply. Childcare is often the largest line item for working parents, with full-time infant care averaging $10,000 to $20,000 per year depending on location and type of care. Add in diapers, formula, clothing, furniture, and medical visits, and first-year costs beyond childcare can run $10,000 or more.²
According to USDA data, a middle-income family can expect to spend roughly $310,000 to raise a child to age 18 — not counting college. Housing, food, childcare, transportation, health care, and education are the primary drivers. For families in higher cost-of-living areas, or those with multiple children, the total can climb considerably higher.³
When college costs are factored in, the figure can approach — or exceed — half a million dollars for a four-year degree at a private institution.
A 529 college savings plan is one of the more straightforward tools for building toward education costs. Contributions grow tax-deferred, and withdrawals used for qualified education expenses are tax-free at the federal level. Starting early — even with modest contributions — gives more time for growth.
Beyond college savings, building a budget that accounts for childcare, health care, and shifting expenses at each stage of childhood gives parents a clearer picture of what to set aside and when.
Having a child changes your financial picture significantly. Building a plan around those changes — before and after the birth — can make the numbers more manageable.
If you found this useful, feel free to share it with someone who may benefit.
Ready to talk strategy? See our current services.
Brent Forrest & Associates, LLC. dba Wela Financial Advisory (Wela) is a registered investment adviser. The information presented is for educational purposes only. It should not be considered specific investment advice, does not take into consideration your specific situation, and does not intend to make an offer or solicitation for the sale or purchase of any securities or investment strategies. Investments involve risk and are not guaranteed. Be sure to consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. This article and images may have been enhanced by utilizing artificial intelligence (AI). Wela may discuss and display, charts, graphs, formulas which are not intended to be used by themselves to determine which securities to buy or sell, or when to buy or sell them. Such charts and graphs offer limited information and should not be used on their own to make investment decisions.
