Colleen and Ted had talked about having children before they got engaged, and had envisioned waiting perhaps only a year or two after getting married to start a family. However as they began creating long-term financial goals and considering how having children would change their life, they realized that being parents was going to cost a lot more than they had originally thought. 

There’s no way around it – having children is expensive.  A recent U.S. Department of Agriculture (USDA) survey found that middle-income families will spend approximately $300,000 to raise a child to age 18.  The majority of the total bill for child-rearing is housing (32%), followed by food (16%), child care and education – not including college (16%), transportation (14%), clothing (6%), and health care (8%).  The remaining 8% is for “miscellaneous” expenses that cover everything from baseball gloves to birthday parties.  That means it costs, on average, nearly $12,600 annually to raise a child.

While that sum can seem like an overwhelming number, you don’t need to let it deter you.  Every family situation is different.  Different family priorities, incomes and support systems mean that it could cost more or less for you to financially support your child.  However it should give you an idea of how important it is to anticipate and have a plan for managing those costs.  Let’s look at the most critical issues parents should consider when planning for a baby.