Kids…I Hear They Are Expensive


By Weston Manley
February 3, 2020




I received a funny email from a client this week letting me know that he and his wife are expecting their third child. “Oh, and Jane is pregnant. That’s probably important. I heard children tend to cost a lot of money.”

Kids are expensive, my wife and I had our first child five months ago and while I’ve been advising people on the cost of having kids, it’s different when you experience it firsthand. So, here are some things that I knew and then learned over the last five months.

Major Costs

Hospital bills: Depending on your insurance, you can expect costs to be between $3,000 and $6,000.  Most hospitals will allow you to finance at 0% if you don’t want to pay the whole thing up front.

Daycare/Nanny: If married and both spouses work, childcare is a necessity.  Daycare ranges from $1,000 – $2,000 per month depending on how many days and where you are located.  Expect closer to $3,000 per month for a full-time nanny.

College: Education costs continue to rise at significant clip of ~5%.  If paying for all of college is part of your vision, consider socking away $6,000 – $8,000 per year for a state school. Check out my post on saving for college for more details. (link)  

The other stuff

Diapers: $50 – $75/month

Wipes: $10 – $15/month

Formula: We use the Costco brand and it’s $80 – $100/month

Food: We just started food (5 months in) and it’s $1/jar.  Our daughter goes through a jar every day in a half right now.

Clothes: This is more of a personal preference.  Baby clothes don’t have to be expensive depending on the brand.

Toys: When they’re young, they don’t play with much even though toys seem to be everywhere.  Not a significant cost and most people receive via gifts.

Babysitter: $12 – $15/hr (at least in the St. Louis area)

When your baby gets older is when things get more expensive.  Activities, summer camp, sleep away camp, sports, etc.

Enjoy every moment but be sure to think about how this will impact your cash flow, retirement savings, and overall financial plan. 

WM


Weston is a Certified Public Accountant, Certified Financial Planner TM, and holds the Chartered Financial Analyst designation. In addition, Weston earned his master’s degree in accountancy from the University of Missouri – Columbia. Weston is active in the St. Louis community and board member of the Anti-Defamation League.

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Weston Manley