“That was the most surprising thing,” Coyle, 34, of San Antonio, says. “Just the amount of diapers you go through. You don’t actually do the math until you have a baby.”
Since becoming parents, Coyle and her partner, Tim Buffington, have been forced to tighten their financial belts to free up money for Jack’s care. They don’t eat out as often, and, when they’re hankering for a movie, they head to the closest Redbox rental kiosk, not a theater.
Like new parents everywhere, Coyle and Buffington are getting a crash course in baby finances.
A recent study from financial website NerdWallet Opens in a new window found that more than half of people hoping to become parents thought the baby’s first year would cost only $5,000. The study then analyzed spending in the first 12 months among households earning $40,000 and those making $200,000, and found that even the lower-income parents spent more than $21,000 on average — well above the $5,000 non-parents think they’ll spend.
In the first year alone, parents can expect to shell out for necessities including cribs, strollers, car seats and, of course, diapers. Child care for working parents adds even more to the tab.
But a little planning before the baby arrives can go a long way toward ensuring you enjoy your tiny bundle instead of worrying about how much parenthood costs.
Child care is the biggest expense
There are a wide range of child care costs, depending on the setting and the quality of caretakers. NerdWallet estimated that an at-home nanny would set the average family back over $26,000 per year, more than the cost of in-state tuition at a four-year public college. It’s something only higher-income families can afford.
Coyle was able to lean on her partner’s mother to care for Jack when she went back to her job as a location scout for a scavenger hunt company, following five weeks of unpaid leave. “That was great to have, especially when I first went back to work,” Coyle says.
After nine months, Coyle and Buffington were ready for Jack to go into daycare. They knew they could afford to pay $1,000 a month, but the center they found charged less.
To tame the costs of child care, keep these ideas in mind:
- Double up: If you’re hiring a nanny to come to your home, ask if that person will watch another family’s child of a similar age at the same time. You’ll pay more for two children, but likely not as much as each parent would pay individually.
- Wait a minute (or a year): The older your child is when he or she starts daycare, the more affordable it will be. Infant care is the most expensive, because centers need to hire more staff to keep up with all the diaper changing, bottle feeding and rocking, according to Child Care Aware PDF Opens in a new window. Care for toddlers is less pricey, and pre-school is even more affordable.
- Shuffle your schedule: If you and your spouse or partner have some flexibility in your schedules, you may be able to get away with part-time child care.