If you are a mom-to-be or thinking about having a child, you already know that pregnancy and childbirth cost quite a lot. It’s wonderful to focus on the more exciting and fun aspects of preparing for the arrival of your little one (like putting together your registry or choosing wallpaper for your baby’s nursery). But taking the time to understand how much having a baby costs will enable you and your family to best prepare financially for the road ahead.
The majority of costs associated with pregnancy and birth revolve around medical expenses. The daily living costs, such as childcare, food, diapers, clothes, and furniture, will make up the majority of expenses after your child is born. Planning financially for your pregnancy and birth, paying for health insurance, having a low-risk pregnancy, and utilizing a midwife instead of a doctor are all ways to reduce costs.
Average Cost of Having a Baby
The most expensive component of pregnancy, childbirth, and your baby’s first year are generally medical costs. Pregnancy consists of numerous visits to the doctor or midwife to monitor the mother and baby’s health. The average cost of having a baby, which includes prenatal care associated with pregnancy and birth by vaginal delivery with a doctor at a hospital, ranges from $5,000 to $11,0001. These numbers include the cost of the whole length of care, the obstetrician’s fee, prenatal care, the anesthesiologist’s fee, and the hospital care fee. Complications surrounding birth, including Cesarean births (C-sections), require more expensive medical care and range from $7,500 to $14,500. In 2020, there were 2,462,904 vaginal births, while 1,148,692 mothers had a C-section2.
The cost of vaginal delivery with no complications and before insurance varies depending on your state. For example, the average cost of having a baby in Alaska is $18,748. In Alabama, a state with some of the lowest childbirth prices, a vaginal delivery, on average, costs $15,162.3
The Importance of Health Insurance
While these are general estimates for the cost of having a baby, two important factors influence the price of childbirth. The first factor is your state. The second is health insurance. States vary in how expensive childbirth is depending on the cost of living.
According to Smart Asset, The Affordable Care Act has greatly reduced the uninsured rate in America.1 While that may be good news, healthcare costs are still rising. Milliman Medical Index (MMI) showed that the cost of healthcare for a hypothetical American family of four covered by an average employer-sponsored preferred provider organization (or PPO) is $28,256 as of 2021.4 Planned Parenthood, a non-profit organization that provides healthcare services to women and children has more information on how to get health insurance if you’re currently uninsured.5
How Much Do Children Cost Per Year?
In 2015, the U.S. Department of Agriculture released an Expenditures on Children by Families report.6 This report estimated that for a child born in 2015 to a middle-income, married-couple household, the child would cost between $12,350-$13,900 annually. This amounts to $233,610 from birth to age 17. With an annual adjustment for inflation of 2.2% each year factored in, the lifetime cost of raising a child born in 2022 could be estimated at $272,049. This cost estimate does not include college tuition or other significant expenses.7
Thinking longer-term when it comes to the cost of raising children is always a good idea when it comes to building wealth. One way to do this is to start a high-yield savings account for junior today. Here are some of the best savings accounts you can put money into for your child that will grow your money, earning you more interest than an average savings account.
What is the Cost of an Out-of-Hospital Birth and Midwife?
According to WhatItCosts.com, a ballpark estimate for a home birth with a midwife is $4,400.8 According to a recent study, the safety of planned, at-home births for low-risk mothers and in the care of credentialed midwives is comparable to those that take place in hospitals. The study concludes that it is economically efficient to do a home birth for low-risk mothers. It also found that a shift of one percent of births from hospitals to homes would result in an annual cost savings of at least $321 million.9 Check out the American College of Nurse-Midwives to learn more about hiring a midwife.
Programs That Support Women, Infants, and Children
Programs such as Woman, Infants, and Children (WIC) and Children’s Health Insurance Program (CHIP) can help moms find low-cost health insurance and other coverage options. The Department of Health and Human Services provides additional health assistance resources for mothers and families. Further, the Health Services and Resources Administration (HRSA) recently announced more funding is underway for free doula funding for mothers. Find out if your state has a program in place here. Utilizing these resources can help you reduce the cost of raising a baby.
So, how much does it cost to have a baby? As you can see, raising a child is not cheap! But doing your research and planning ahead will help you be more prepared when it comes to paying for all the stages of raising your little one. And once you become a parent, you will realize that your sweet bundle is worth every penny!