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Cost of Having a Baby

For many expectant parents, one question looms above everything else: how much does it cost to have a baby? While you might be tempted to forget about this to focus on more exciting things like decorating your nursery and buying all the new clothes the baby will need, it’s an important thing to think about. The pregnancy itself is filled with costs that accompany the numerous doctor’s visits, tests and procedures you may have. Therefore, you’ll want to make sure you have enough financial cushion before you decide to have a child. If you’re preparing to grow your family, you may want to consider enlisting the services of a financial advisor.

Average Cost of Having a Baby

The costs of having a baby include more than just the actual childbirth. These costs also include the regular check-ups, tests and prenatal care associated with pregnancy. The average price of having a baby through vaginal delivery is between $5,000 to $11,000 in most states, according to data collected by FAIR Health.

These prices include the total duration of care, the obstetrician’s fee (including prenatal care), the anesthesiologist’s fee and the hospital care fee. The average costs for a Cesarean or C-section birth range from $7,500 to $14,500. Complications during birth, however, for vaginal or C-section delivery will increase the charges for childbirth.

This doesn’t take into account the type of health insurance that someone may have when they decide to have a baby. So while the average costs are accurate, what you actually end up paying could be dramatically different. Some types of health coverage will pay the majority of the bill when you have a baby while others will cover a percentage of the total cost. This comes into play pretty quickly when we look at the state-specific data.

Cost of Having a Baby by State

Although we’ve listed the average costs of having a baby in the U.S., it’s important to note that these costs vary for each state. Key factors that influence the final costs of childbirth include the state and its cost of living, the type of birth delivery and whether or not the patient has health insurance. While the exact costs of childbirth range anywhere from $4,000 to $20,000, we’ll look at the two states with the highest and lowest childbirth costs.

The cost of vaginal delivery with insurance in Alaska is $10,681, whereas the costs without insurance total $19,775, according to Fair Health data. The state with the lowest childbirth costs is Alabama. In Alabama, vaginal delivery with insurance costs $4,884. A delivery without insurance, however, costs $9,013. C-section deliveries, with or without insurance, for each state enhance your final costs significantly.

This, of course only covers the costs of actually having the baby and doesn’t go into the costs that are going to increase once the baby is born. Two of the major cost increases that you’re going to have when you have a baby are that your rent is going to increase with needing more space in your home, and you may need to spend money on childcare.

These costs vary quite widely by state, but no matter where you live you can expect that childcare expenses could cost an average of $6,000 – $10,000 while rent increases average $1,000 – $3,000 per month. Depending on your state, this can put the total first-year cost of having a baby somewhere between $15,000 – $30,000.

How Health Insurance Affects the Cost of Childbirth

Cost of Having a Baby

Federal law mandates that pregnancy and maternity care receive coverage in health insurance plans. This requirement, however, contains two key exceptions. The first is that you can stay in your parent’s healthcare plan up until age 26. This doesn’t cover delivery and newborn care, but it covers pregnancy and maternity care. The other exception is that grandfathered health plans, or plans created on or before March 23, 2010, won’t guarantee pregnancy and maternity care.

If you want to know how much of the pregnancy and childbirth costs your health insurance will cover, keep in mind that the deductibles, copays and coinsurance associated with your plan will affect the amount covered.

Another factor that determines the number of medical costs your plan covers is how much money you’ve paid toward your out-of-pocket spending limit for the health plan year. Finally, the amount of costs covered is affected by whether or not your plan’s provider network includes the hospitals and doctors you’re using.

How to Save Before Having a Child

The process of having a child is one that requires a lot of preparation. But you can get ahead of the game in a few different ways. For starters, try to find out how much the hospitals near you will cover under your health insurance. This can get you a head start in knowing what it will cost you when the time comes.

You can also save money by cutting back on unnecessary purchases. Furthermore, the more you cut back on buying things you don’t absolutely need, the more money you’ll have to dedicate toward childbirth medical costs. You can keep these funds anywhere that you would keep an emergency fund, such as in a high-yield savings account.

Finally, many people financially plan a way out in advance of having a child. Just like saving for a wedding or a vacation, saving for a child can help you prepare for the added costs since having a baby is a new cost that isn’t likely to decrease much with the exception of paying for the actual birth. There will continue to be new costs for children as they age.

The Bottom Line

Cost of Having a Baby

Overall, having a baby can be both a joyous and life-changing experience. It’s amazing to embrace your newborn with loving arms, but you don’t want to break the bank in the process. It’s important to remember the expenses that come with pregnancy and childbirth. In addition, keep in mind that complications during birth can increase those costs.

Tips for Saving Money

  • If you’re considering having a baby, it can be helpful to talk to a financial advisor first. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • One of the ways to best prepare yourself for the costs of having a baby is making a budget. Write a list of your most important expenses and cut out other unnecessary purchases. In other words, separate the needs from the wants. Before you know it, you’ll have a bit of leftover money.
  • Consider placing this extra money in a high-yield savings account that can help you make the most of your savings. These are the best savings accounts available now.

Photo Credit: ©iStock.com/Rostislav_Sedlacek, ©iStock.com/Kate_sept2004, ©iStock.com/SolStock

Rickie Houston CEPF® Rickie Houston writes on a variety of personal finance topics for SmartAsset. His expertise includes retirement and banking. Rickie is a Certified Educator in Personal Finance (CEPF®). He graduated from Boston University where he received a bachelor’s degree in journalism. He’s contributed to work published in the Boston Globe and has worked alongside award-winning faculty for the New England Center of Investigative Reporting at Boston University. Rickie also enjoys playing the guitar, traveling abroad and discovering new music. He is originally from Wilmington, North Carolina.
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