Bank like a financial pro with the Alliant mobile app. Make payments, deposit checks, manage cards and so much more.
Renovate your kitchen, pay off high-interest debt, or have access to emergency funds when you need it with an Alliant Home Equity Line of Credit.
Browse new and used vehicle inventory, and qualify for a rate discount when you buy!81
Separate each of your savings goals into an Alliant Supplemental Savings Account so you can visualize your progress.
By Allison Videtti
I’m expecting my first child in a few days, and I couldn’t be more ready to finally meet my baby. My bank account, on the other hand? That’s another story. I don’t know if there’s any way to fully prepare my monthly budget for the cost of raising a child.
According to the most recent data from the United States Department of Agriculture (USDA), released in 2014, the average cost to raise ONE kid to the age of 18 is over $245,000 (more than $304,000 when adjusted for inflation), excluding costs associated with pregnancy and college.
That’s a whole lot of money, especially considering the cost of having a baby (which averages around $3,400 out of pocket) isn't part of your family budget. Planning on paying for college? You’ll need to add an additional $20,000–$45,000+ per year to your total spend PER CHILD.
But what, exactly, are you spending money on? Here’s how the percentage of spending breaks down for middle-income families' children:
Incidentally, the most expensive child-rearing years are 0-2 years old (approx. $12,940 per year) and 15-17 years old (approx. $14,970 per year).
When my husband and I were finally ready to share our big news, one of the first people we told — after friends and family, of course — was our financial planner. We were nervous about how we’d afford the cost of raising a child and we knew she’d be able to offer some tips on budgeting for baby.
We knew we’d be buying baby clothes, diapers and bottles, but we didn’t think about some of the less “exciting” things we’d be spending money on. Babies go to the doctor a lot in their first year (an average of six to 12 times, assuming baby is healthy), which means $100–$300 in insurance co-pays that need to be factored into our budget.
We do a lot of cooking, but our financial planner said we’ll probably spend $100–$200 on takeout that first couple of months as we get into a new routine — and that should be added to the budget as well.
She also warned against underestimating the number of diapers we’ll need: We could go through around 10 per day! A “giant” pack of diapers at Target costs $35 and has 148 diapers, which means we’ll need to budget around $70 per month for diapers.
Our financial planner advised that we can’t open a 529 college savings plan until our baby is born, but told us that we should open one as soon as she arrives. That way, we can set aside a few hundred bucks a month from our budget over the next 18 years, vs. trying to play catch-up when baby’s closer to college age. She also said that in the early years, we should request friends and family contribute to our 529 plan for birthdays, holidays, etc., instead of buying baby toys she won’t play with.
She also reminded us that since we’ll be working while our daughter is in college, we’ll likely be paying for some of her schooling from our income instead of trying to do it all from savings.
My husband and I each have a life insurance policy, but our financial planner told us we were better off dropping it & opting for disability instead, or having both plans, with baby on the way. That’s because a person under the age of 65 is far more likely to become disabled, at least for a short period of time, than to die during their working years — and disability coverage offered through the workplace might not be enough. The average annual cost of disability insurance is about 1 to 3 percent of your annual income, or between $500 and $1,500 per year for someone earning $50,000. While this isn’t exactly a child-related cost, I do want my family to be covered in the event my husband or I wind up out of work for a while due to an injury.
While there’s no way to full prepare your monthly budget for the average cost of raising a child, adjusting your spending and your expectations before baby comes will (hopefully) make the transition to parenthood a little easier on your wallet. I’ll let you know in a few months!
Allison Videtti is a social media/digital marketing specialist at Alliant. In her previous life, she worked in real estate and held multiple positions at a Chicago-based digital marketing agency, overseeing content strategy for a number of financial services clients. Allison's always been a saver and is something of a personal finance junkie. She loves reviewing her spending and updating her budget, and can't get enough of finance-related blogs and podcasts. Her favorites? Wisebread.com and the Planet Money podcast.
Sign up for our monthly newsletter to help you stay at the top of your financial game.
Welcome! You'll now have financial tips sent to you directly each month.
You are leaving Alliant’s website to enter a website hosted by an organization separate from Alliant Credit Union. The products and services on this website are being offered through LPL Financial or its affiliates, which are separate entities from, and not affiliates of, Alliant Credit Union.The privacy and security policies of the site may differ from those of Alliant Credit Union.
You are leaving an Alliant Credit Union website and are about to enter a website operated by a third-party, independent from Alliant Credit Union. Alliant Credit Union does not manage the operation or content of the website you are about to enter. Alliant Credit Union is not responsible for the content and does not provide any products or services at this third-party website. The privacy and security policies of the site may differ from those of Alliant Credit Union.