Can I really afford to have a baby?

As an expectant parent, you need to be concerned about two basic types of costs: the long-term costs of raising a child to age 18 (or later, if your late bloomer takes a little longer to fly the coop) and the short-term costs of giving birth to a child.

What it costs to raise a child

Government statistics about the costs of raising children are enough to send you sprinting to the doctor’s office for a refill on your birth control prescription. According to the latest numbers from the U.S. Department of Agriculture, for example, you can expect to spend somewhere between $127,080 and $254,400 raising a child from birth to age 18, depending on your household income (see Table).

But before you resort to such drastic measures, you might want to bear in mind that you’re not required to have the entire lump sum saved in advance and that there are always ways to cut corners if you have to. (Hey, where there’s a will, there’s a way!)

If, for example, you decide to shop second-hand for baby clothes or you’re lucky enough to be on the receiving end of a lot of hand-me-downs from an older sister who is finished having her family, you could very well whittle that $380 first-year clothing expenditure down to virtually nil.

Money saver

If you’re worried about the financial hit you will take when it comes time to set up the nursery, start putting money aside as early on in your pregnancy as possible. Have your bank transfer a small amount of money per week into a separate savings account, and you’ll have a nice nest egg to draw upon when it comes time to start shopping for baby equipment.

The figures shown in each age line indicate the expenditure for each year that the child falls within a particular age range. For example, a child will be under the age of two for two years (age birth to one and age one to two), so if your income is under $39,700 you would need to count on having two years of expenditures in the $6,620 range.

So while it’s only sensible to arm yourself with the facts, you don’t want to drive yourself totally crazy worrying about money or - even worse - convince yourself that you can’t afford to have a baby because you don’t have Junior’s Harvard tuition socked away just yet. (If that were the criteria for becoming a parent, there would only be a handful of babies born in the United States each year, after all.)

What it costs to give birth

While there’s no such thing as an “average cost” of giving birth in America, a typical hospital birth can run anywhere between $11,000 and $20,000, depending on whether your baby was delivered by a doctor or a midwife, whether you required the services of an anesthesiologist, and whether your baby was delivered vaginally or via cesarean section. Fortunately, the only one who is likely to see the final tab for your baby’s birth is your health insurance company. Assuming you have adequate health insurance coverage, you’re only likely to find yourself out-of pocket for a small percentage of these costs.

And speaking of health insurance, if both you and your spouse have access to health insurance plans at work or through the government (because you’re on Medicaid), go with whichever one offers the most bang for your buck. You might want to use the following checklist to help you decide which health insurance plan will best meet the needs of your growing family.

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