People often say that nothing can prepare you for becoming a parent. That is true in a lot of ways, but there's one area of parenthood you can prepare for — the cost.
So, how much does it cost to raise a kid? The average cost of raising a child is nearly $234,000 from birth to the age of 17 — or about $13,800 a year, according to a report from the U.S. Department of Agriculture (USDA).
As a new parent, you can expect to pay for everything from labor and delivery to childcare expenses, housing, utilities and more. As parents, we also make countless choices about what's best for our children, and these decisions can also affect your family budget.
When it comes to the cost of raising a child, here's a breakdown of what you can potentially expect.
Labor & Delivery
If you plan on growing your family, it's important to be financially prepared before you even give birth. Families are charged $12,290 on average for a vaginal delivery and $16,907 on average for a C-section, according to FAIR Health. If you don't have insurance to help cover these services, the out-of-pocket costs can be really high.
But if you do have health insurance, it's still important to read the fine print of your health insurance policy to understand the percentage your insurance will cover and how much will be your financial responsibility. Once you have a better idea of these costs, you can likely make more informed decisions about things like your birth plan and where to seek care.
The cost of childcare can vary depending on whether you decide to employ a nanny, go to an in-home daycare or go to a daycare center. Costs also vary depending on where you live. For example, you might pay $5,600 a year, or $470 a month, for childcare in Alabama, but if you live in D.C., you might pay $22,631 a year, or nearly $1,900 a month, according to the Economic Policy Institute.
Consider doing some research on childcare options in your area once you and your partner decide you want to have kids, so you know what kind of childcare you can afford and how to budget for it. You may really want a full-time nanny, but if the costs will force you to drastically cut back on other expenses, it may make sense to explore other options.
Health care costs have also steadily increased in the last 10 years, according to the Milliman Medical Index. Milliman reported that the average yearly health care cost for a family of four was $28,166 in 2018.
If you have an employer-sponsored health plan, you might be able to choose between different tiers of insurance. It may be hard to determine your family's future health care needs right now, but kids get sick all the time and have several important doctor's appointments during their first two years. Consider evaluating your health plan options to see which tier of coverage provides the services you need for as affordable a price as possible.
Transportation, Housing-Related Expenses & Food
For transportation, families can expect to likely spend an additional $140 a month, and an additional $130 a month per child on housing-related expenses, according to the aforementioned USDA report. Another USDA report on food costs found that it costs anywhere from $94 to $176 a month to feed a one-year-old child, depending on a family's food budget.
But these numbers are national averages. If you live in an area with a high cost of living, it might cost even more. You may want to sit down with your partner to look at your household expenses now and — using these averages — what they could be in the future. That will help give you a better idea of what you'll pay each month to run your household and how to structure your family's budget.
Like daycare, early childhood education can be expensive. Child care has a national average of around $9,000 to $9,600, according to a study by Child Care Aware of America. Then, if you decide to send your child to a private school, you can expect to pay anywhere from a national average of $10,671 a year up to over $45,000, depending on your home state, county or town.
Even if you choose to send your child to public school, which is free, there are other costs to consider, like clothing, lunch and school supplies. A survey by the National Retail Federation found that parents with kids in elementary and high school spend an average of nearly $685 on back-to-school supplies.
These costs aside, whether you choose public or private school, you may want to think of your child's education as an investment that can set them up for future success.
Preparing for the Cost of Parenthood
Affording all of the basic necessities may seem daunting, but you can help ease these concerns by putting a financial plan in place to set your family up for long-term success.
While this plan doesn't have to be super formal, understanding your current expenses, income, and future savings goals and priorities can help. This might involve some conversations with your partner about home versus hospital birth, public versus private school, and more. These talks may challenge you, but being able to make these choices together could help you prepare for the path ahead.