Last week, Caryn mentioned in the comments that she'd "love to see [a post] about the financial impact of a baby and how you're planning for that." This is a really, really good question, and one that has been the subject of near-endless discussion at my house for many months now. I think there are a lot of misconceptions about this subject, too, so in the spirit of Honesty Day, let's talk about the dollars and cents part of this baby equation, shall we?
I've been hanging around the alternative mommy message board scene for quite a while now, and if I've heard the following once, I've heard it a million times:
"Don't worry about money! Babies aren't expensive! You can get all of their clothes and stuff used/handed down, use cloth diapers to save money, and breastfeed!"
I'm sure that for someone, somewhere, that's true. In some utopian world, babies are so cheap as to be financially inconsequential. That is not the case in my world, however. In my world, this kid comes with a very high price tag. And I'm gonna tell you just how much, or at least as close as I can estimate.
We are really, really lucky on this count. Some people are in debt for years for the costs of prenatal care and childbirth. As Mark's domestic partner, I am allowed to be on his insurance (which he is then taxed for as compensation, which would not happen if we were legally married, but that is a digression and a rant for another day). Mark has very good insurance, and during his open enrollment period this year, when I was newly pregnant, we upgraded it to very, very good insurance. My prenatal visits, with midwives (and I will write a separate post about why I decided to go that route, another great idea from last week's comments), are 100% covered--no copays. Our two ultrasounds cost about $40 each. The two times I had to go into the hospital for IV hydration were $20 each. And my delivery, depending on the specifics, will be no more than a couple of hundred dollars. If there are no complications, it may be less. As soon as s/he's on the outside, the baby will be covered by the same insurance, without an additional premium payment on Mark's part, and it will be similarly fantastic coverage. Like I said, we're VERY lucky.
In reality, though, our case is becoming the exception rather than the rule. It is hard to estimate what other folks are shelling out for prenatal care and delivery, but it runs into the the thousands, and if you have to pay for it completely, can be $8K or more for an uncomplicated pregnancy and delivery, and skyrocket into tens of thousands if there are any issues, even relatively minor ones.
There are also non-doctor medical costs. Prenatal vitamins, massage/chiropractic care/physical therapy if that becomes necessary, the incredibly useful maternity pillow...these things add up. I haven't been keeping track, but I'd say they've come to a couple hundred dollars over the course of my pregnancy.
I could write a many, many page treatise about being prepared for the cost of day care. Day care, particularly full-time care for an infant, is extraordinarily expensive. I am not talking extended cable expensive, or car payment expensive, or student loan expensive. I'm talking mortgage/rent expensive, or "I could send my kid to college for that!" expensive. For many people, even with only one child, day care represents the largest of their monthly financial outlays, or at least the second largest, after housing. That will be the case for us. The day care centers on my list of options range from about $1,300 to over $2,000 a month (the one we chose lands in the middle of that range). You have to be pretty well off for a new $1,300+ monthly bill to not significantly change your financial situation.
Are there cheaper options? Some, but not a lot. An in-home day care, rather than a center, might cost a few hundred a month less. But finding and vetting one is, at least from my experience so far, a much more complicated process. There is also the question of reliability--a single provider might get sick or have an emergency that would preclude the kid going to day care, and a center likely won't. A nanny would, of course, be more expensive.
And this is the point at which someone inevitably pipes up with the stay-at-home option. I have lots to say about that, and I'm not sure how much of it I want to say here, in fear of mass alienation of readers. The bottom line is that having a stay-at-home parent is not an option that is even under consideration for my family. It would be a financially disastrous idea, even if one of us were willing to put our careers on-hold to do it, which we are not. So day care is, in our case, a necessity.
The amount in lost income a baby represents is completely variable. Some people, I hear, actually have paid maternity leave! Needless to say, I don't. In fact, as a contractor, I'm not even covered by FMLA, so, in theory, taking time off to have a baby and recover from labor and all that could lose me my job. Doesn't look like that is going to happen, but it could. However, the time I take off (which will be at least 8 weeks and may be up to 12, depending on how things go) is going to cost us. Because I have a short-term disability policy that covers childbirth recovery, some of my lost wages will be re-cooped, but a lot of people are not that lucky. I estimate the time I'm taking off will cost me between $5,000 and $7,500.
The big ticket items
Though it's popular to say that you don't actually NEED any of that "fancy baby crap," the truth is that most people use a lot of the items that are sold for babies. They may not strictly be necessities, but they make life a lot easier/more pleasant. And Mark and I are going into this with the idea that it's going to be hard enough without trying to be spartan about it. So we're buying a good few baby items. Note, though, that none of them are the top-of-the-line version--we're trying to be as moderate as possible, getting things that are of a quality that will see us through, but knowing that, since we're only planning to have one child, we won't need them to last a lifetime.
Carseat: This is one everybody pretty much agrees you shouldn't skimp on. We got lucky here, again, because we're inheriting a barely-used seat from a trusted source (you shouldn't go in for used seats if you don't know/trust their providence, since seats that have been in accidents need to be replaced). The seat we're inheriting is the Chicco KeyFit 30. If we had to pay for it? It would be somewhere between $150 and $200.
Stroller: A good jogging stroller is an important purchase for us, since Mark plans to take the baby on lots of walks with Ata. Yes, we could just use a wrap, and likely he will early on, but babies get big fast, and we believe we'll get good use out of a stroller. We aren't totally sure which model we'll be purchasing yet, but the one we're leaning towards is the Baby Jogger Summit. The price tag? $400.
Crib: Lots of people don't use cribs. Others have fully decorated nurseries. We're taking an in-between path. We do plan to purchase and use a crib (more on that later), but aren't planning to purchase any fancy bedding sets (just fitted sheets and mattress protectors) or have a theme, or anything like that. Cribs come in a pretty wide variety of shapes, sizes, and costs. Many of them are designed to "grow with" the kid and covert to toddler beds, then twin beds, and even full-sized beds. That seems like decent sense. We've looked at quite a few, and decided we're probably going to go with the Graco Signature Convertible Crib, which runs around $200. That's just the crib, though--we'll still need to buy a crib mattress (for anywhere from around $40 to about $200) and lots of fitted sheets.
Co-Sleeper: After giving it a lot of thought, Mark and I decided to go ahead and a get a co-sleeper. A co-sleeper is a small, bassinet-like thing that attaches right to your bed for the baby to sleep in for the first few months of life. The idea is that night nursing will be made much easier by the kid being right there (as well watching him/her sleep and not freaking about whether or not s/he is breathing), but s/he won't actually be in bed with us. It's a bit of a middle path between putting the baby in his/her own room in a crib immediately and true co-sleeping. Again, there are a list of reasons behind this decision, but that's probably another post in and of itself. The basic model co-sleeper we're going to get, the Arm's Reach Mini, costs about $150. It comes with a mattress and one fitted sheet, so we'll just have to buy a few more sheets for it and we'll be set.
So, why BOTH the crib and the co-sleeper? Well, due to the weight limits on it, the baby will only be able to sleep in the co-sleeper for a few months (up to 4 or 5 months, probably), and will then need to transition to the crib. We also plan to do naps in the crib from the beginning, so that s/he will immediately get used to sleeping by him/herself.
Pack N Play: This is another thing that I'm sure at least one person is going to say we don't need, but I think will be useful. We live in a three-story house. Our bedroom, and the baby's bedroom, are on the third floor. Our main living space is on the second. I want a place to lay the baby down downstairs, or even a place for him/her to nap there. A bassinet or Moses basket would work, but only while s/he is very small--a Pack N Play will have utility later, as well, and also give us a place to do diaper change that isn't the floor. We're going with a mid-range model, with a bassinet attachment for when the babe is small and a changing station, probably the Graco Pack 'n Play Playard with Newborn Napper Station. It will cost about $150.
Other furniture: This is an area where we are more or less skimping. We're not buying a dresser for the baby--the are a set of open shelves already in his/her room that we plan to use for storage. We were going to buy a changing table, but I got extremely lucky at the thrift store a couple of weeks ago and found this $350 changing table in great shape for $25. We will just need a pad and some covers for it. Since the kid already has a pretty good book collection, we'll probably need to pick up a bookshelf for his/her room, but hopefully that can be thrifted as well. The only other piece of furniture we're considering is a glider, for rocking and nursing. We haven't picked anything out yet, but the cost on those looks to be anywhere from $150 on up, and we'll probably go with something at the lower end of the range.
Lots of people swear by cloth diapers for money-saving purposes, and I get the logic, but honestly, it's not gonna happen. Even if I were willing to take on the extra mess and laundry, we'd have to go with half-time disposables as soon as the kid goes to day care anyway. Doesn't seem worth the initial diaper outlay. So, we're going to use disposables. Cost estimates on that vary (depending, often, on whether whomever does the estimate wants you to use cloth or disposable), but we're tentatively planning for $50-$75/month. Then there are wipes, creams, etc. for a few bucks more.
And here is where it gets REALLY political. If you are pregnant, or thinking of getting pregnant, or, you know, female at all, somebody will, at some point, tell you that nursing is free. Nursing is not free, at least not in the great majority of cases. It may be cheaper than formula-feeding (though, in my case, I'm not sure that's going to be true), but it's not free.
How not? Well, the first thing to consider is the increased caloric need of the nursing mom. More calories=more food=more money. But that's probably not a huge outlay, and it's hard to estimate, so I'm not going to dwell on it. There are also nursing supplies--Bobby and cover, nursing pads, nipple creams, etc.--those things will add up a bit, but again, not a huge outlay. The real costs, from what I can tell, come from the combination of nursing and working. Pumps, especially pumps that are decent enough to make pumping at work doable for a lot of women, are not cheap. There are several pump options, at a variety of cost points, from small manual pumps to hospital grade versions. Sometimes, you can even rent pumps. I'm not sure what I am going to do yet--it's going to depend on how things go--but probably if nursing works out well enough for me to commit to several daily pumping sessions at work, I'll need to go with something like the Medela Pump in Style Advanced, which runs about $350. It is possible insurance will cover it, I haven't figured that out yet.
There's also the time factor. While time to pump at work is protected, it's not paid. So whatever time it takes me to pump at work each day is time I am off the clock, and thus a loss in my hourly income. It's hard to estimate how big a bite that will take, since I have no idea how well pumping will or won't work or how much time it will demand, but my guess is that it won't be insubstantial.
There will be other smaller costs associated with pumping, as well, including sterilization bags, bottles or bags in which to store/freeze milk, etc.
Clearly, I plan to attempt breastfeeding. However, I am not afraid to go to formula if I feel that is what we need to do, or to do a combination of formula and breast milk. That leads to a new set of costs--bottles, nipples, a microwave sterilizer (I'm told this is key), a drying rack...I actually got a number of these things as shower gifts, so it won't likely add up to all that much for me, but they're still costs. Then there is the formula itself. Again, cost estimates vary greatly depending on who is doing the estimating, but the most reasonable sounding numbers I've seen estimate full-time formula use at $80-$120/month.
Then there is the assorted baby stuff. Clothes, blankets, pacifiers, burp cloths, and on and on and on. I have no way to quantify how much that all costs, as it is so highly variable, depending on how much of you get as gifts, where/what you buy, and so on. We haven't spent much at all on that sort of stuff yet, as we've been VERY generously gifted, but I expect it will start to add up once the kid is here and we see exactly what we need and don't have.
So a very rough total estimate? Somewhere around $7,000-$9,500 initial layout, then another additional $2,000 or so in monthly expenses. Not exactly cheap. In fact, I think you'd be hard pressed to argue that doesn't totally change the financial picture.
Getting back to Caryn's question, she asked how we're planning for this financial hit. We've actually been planning for it for quite some time. When Mark and I first started talking about having a baby, there was a certain amount of money he wanted to see in our emergency savings account before we started trying. Mark is a lot more financially conservative than I am, and I thought the number he wanted to shoot for was ridiculous. So, we negotiated, and came up with a new number, as well as a target date for getting to that number and a target date to start trying to conceive. When the TTC date came, we weren't quite to the savings goal, but it was within reach, and so we went for it.
Since I've been pregnant, we've gotten a bit more serious. What we decided to do was to start pretending that the biggest baby expense (day care) was already upon us, and "paying" it into our savings account. We've been doing that for the last six or seven months. This serves two purposes. First, it gets us used to the great level of financial austerity needed to work an additional $1,500/month or so into our budget. Secondly, it helps us to get to that savings goal we talked about. It has worked out well. As there always are, there have been some large unexpected expenses (veterinary expenses, as it turns out, which I will post about on another day), so our savings is not quite where we'd like it to be, but it's close(ish), and I feel pretty secure that we've been responsible about planning the financial side of this.
Honestly, I am at a loss as to how people who aren't so lucky as Mark and I have been, financially, make this work. Obviously the cost of living here is quite high, and that makes things like day care more expensive, but even in places with a lower COL, it's significant. And the medical expenses some people face are extraordinary. Then you add up the little things, and even if you try to go bare-bones, it isn't cheap. It's a daunting financial proposition. Which is why I find the "it will all work out! babies are cheap!" line of discussion so very frustrating. I just don't see how that reflects reality for the great majority of people.
None of this is to say that I am sorry we're doing this. I'm so, so not. I am just really thankful to be doing it now, when we're in such a privileged financial position. It would be extremely stressful to be facing all of these new costs without the cushion we've been able to build, and without the good, stable jobs we've been able to find. We're extraordinarily lucky.