Budgeting for a baby

If you’ve been thinking about expanding your family, you might be focused on baby name brainstorming and dreaming of chubby little fingers and toes. But have you considered the financial impact of raising a child? According to LendingTree, it could cost a middle-income family about $303,418 to raise a child born in 2024 up to age 17, not including college tuition.¹ But don’t panic. Instead, use this information to your advantage as you put together your financial plan alongside your baby registry.

When you break down that LendingTree figure into annual costs, the average middle-income, two-parent family spent about $16,857 per child each year, which includes housing, food, transportation, clothing, health care, child care/education, and miscellaneous expenses. By taking a look at cost considerations in each of these categories you can be in a better position for budgeting for your new bundle of joy.

Housing (29%)

Providing a place for your little one to call home will be your biggest expense, especially if you need to move to a larger home or new neighborhood. As you consider where to raise your child and the associated costs, don’t just think about your mortgage cost; also take into account taxes, utilities, home repair costs, location, and house furnishings/equipment. When it comes to location for example, certain areas of the country may have a lower cost of living, but how are the school systems? You may decide to live in a smaller (less expensive) house in a neighborhood with a better school system. And whether you move to a bigger house or stay put, don’t forget to think about the cost of furniture for your child. For example, baby’s tiny crib will some day be replaced with a “big kid bed” – which might not last all the way until college.

Child care/Education (16%)

Even before they’re old enough to read a book, or begin creating artwork for you to hang on the fridge, the costs of child care and education will become a part of your expenditures. If you choose to be a stay-at-home parent, especially during your child’s early years, you won’t incur the cost of regular daycare (though you will miss out on earnings). But if you instead choose to work, you’ll need to consider the expense of a daycare facility or other child care provider. Consider comparing the costs of both of child care versus having a stay-at-home parent. And don’t forget about babysitting costs, which can become a factor as soon as you’re comfortable letting someone else watch your little one.

Once your child is old enough to attend school, you’ll incur costs whether they attend a public or private institution. These expenses can include everything from tuition to money for books, class trips, and backpacks, not to mention the recurring costs of school supplies for all the pencils, crayons, and notebooks that seem to disappear into thin air. Remember, the LendingTree costs don’t include expenditures beyond age 18, which means you’ll need more for education costs like college or trade school tuition. Creating a plan now will prove extremely beneficial when that time comes for your baby. By saving small amounts each month soon after your child is born, you could build a sizeable college fund over the course of 18 years. There are several ways to help pay for your child’s education, including a 529 education savings plan.

Food (18%)

Your new addition will need to be kept well-fed for proper growth and development—and whenever you just can’t turn down the plea for “one more cookie.” These costs include any food and nonalcoholic beverages purchased at grocery, convenience, and specialty stores, dining at restaurants, and household expenditures on school meals. Take some time to think about the kind of diet you want your child to have. Healthier food options can mean more expensive food options than their less nutritious counterparts, so if you plan to feed your child with organic and/or locally grown produce, you could also be looking at higher prices. You’ll also need to consider any cost of meals involved in sending a child to daycare, as well as whether you’ll prepare their lunch versus paying for the school to provide it, and the expenses of both options.

Transportation (15%)

If there’s currently a motorcycle, two-door sports car, or something similar in your garage, you may want to explore the option of purchasing a more baby-friendly vehicle before your little one arrives. Children can require regular travel, whether it’s for a doctor’s visit of some sort, a late night car ride to lull them to sleep, or a longer trip with you to see family and friends. If you’re a driving household, you’ll be responsible for expenses including down payments for a vehicle, monthly car payments, gas and oil, maintenance and repairs, and insurance. Or, if you rely on public transportation and will continue to do so with your child in tow, there are still fare costs to keep in mind, especially as your little person gets older and requires his or her own seat on a bus, train, or plane.

Health care (9%)

Those doctor’s visits you may be traveling to with your child come at a price. You will have to account for your child’s various health care costs each year, such as out-of-pocket medical and dental services, prescription drugs, and health insurance premiums not covered by Hewlett Packard Enterprise as part of your medical plan. Of course, these expenses will vary, depending on the health needs of your little one.

Miscellaneous (7%)

This category relates to your child’s personal care needs, entertainment, and non-school reading materials. Here is where you account for regular haircuts, toothbrushes, books they’ll pore through, movies they’ll ask you to play repeatedly, sports equipment, tap shoes, musical instruments, and more. While in the grand scheme of things, it’s a small portion of your annual expenditures, it may be worth it to start the doll/baseball budget soon.

Clothing (6%)

Before long, your brand new baby will have you up to your ears in diapers. And because he or she will grow so quickly, the clothing and shoes that fit last month may be too small in the next. It’s important for you to keep in mind these expenses and more, including additional apparel like coats and hats for cold weather. And while you’re keeping all that in mind, also remember that your child may make a career out of dirtying his or her clothing, making this budget all the more necessary.

And don’t forget…

Keep in mind that these percentages are only averages—what you may incur in each category will depend on your circumstances. Further, even if you make preparations for what you may need in each category, you should also consider creating a separate emergency fund. When you have a family to support, having three to six months’ worth of expenses in cash reserves is especially important, should an unforeseen circumstance arise. Similarly, it may also be a good idea to review your life insurance needs to be sure your family will be protected in the event of your death. You can do the same with your disability insurance to ensure you’re covered if an unexpected event prevents you from working and earning a paycheck for an extended period of time.

The bottom line

Though raising your child can be a large investment, the pleasure you’ll get from it is priceless. Being aware and prepared is half the battle.

¹ LendingTree | Raising A Child Study | 2026 | 

© 2026 FMR LLC. All rights reserved.
ERNA