Has the question "Should I have another baby?" crossed your mind? Many parents eventually find themselves faced with the decision of whether to have another baby, or whether their family is complete. It can be a difficult decision for many, often fueled by a variety of factors from emotions to logistics.
But preparing for a baby is also largely a financial decision. In fact, many people rely on their financial situation as the determining factor in family planning. In this article, we’ll share a few questions to ask yourself when weighing the costs of another baby.
The cost of raising a child
Data from the U.S. Department of Agriculture shows that the average cost to raise a child is $233,610 (or $284,570, if you account for inflation). This number factors in all of the necessities to raise a child, such as food, shelter, and transportation, but it doesn’t factor in the cost of college.
Obviously, these numbers aren’t concrete. Some parts of the country have significantly higher costs of living than others. Additionally, some families live more frugally than others, either by choice or necessity.
The cost of raising each child also decreases with the number of children you have. For example, a family with two children spends 27% less per child than a family with just one child. A family with three children spends 24% less per child than a family with two children, and so on.
Should I have another baby? Weighing the costs
Here are some costs to weigh as you consider having a second baby:
Childcare often faces the greatest burden for families because it’s the largest new expense that comes with raising a child, making up an average of 16% of the cost of raising a child. Sure, you have to provide food and housing, but you were already spending money on those things. Childcare, on the other hand, is an entirely new and very large line item in your budget.
The average full-time childcare center for an infant costs about $16,200 per year. And while many centers offer discounts for multiple children, the cost is still significantly more when you add another child to the mix.
When deciding whether to have another baby, ask yourself whether you can afford childcare costs for another child. If not, can you or your spouse afford to leave your job to stay home with children while they’re young, and childcare costs are most expensive?
Housing makes up the largest line item in most family budgets and accounts for 29% of the total cost of raising a child. For many families, housing isn’t a factor when it comes to adding another child to your family. If you have plenty of space in your current home, you may not face any additional costs at all.
However, for some families, another baby may eventually mean having to upgrade the family home, which is likely to result in higher housing expenses.
When you add another child to your family, you can expect your food costs to increase, especially as the child gets older. The USDA data shows that food makes up about 18% of the cost of raising a child.
Food expenses can start immediately with the cost of baby formula. The U.S. Surgeon General estimates that formula for a baby’s first year can cost between $1,200 and $1,500.
Costs are likely to increase from there. The USDA publishes food plans that share the cost of food at home at four levels ranging from moderate to thrifty. Even on the moderate plan, the monthly cost of feeding a child ages 2 to 3 is $108. For the liberal plan, it’s $2.04.
By the time a child reaches age 14, a male child is likely to cost between $181.50 and $373.20 per month, while a female is likely to cost $172.40 to $319.10.
Transportation makes up about 15% of the cost of raising a child. The first question to ask yourself when it comes to transportation is whether you’ll have to upgrade your vehicle when a new baby arrives. If so, that could present a significant upfront cost.
In the long run, you’ll have plenty of other transportation costs, including driving your child to school and various activities, upgrading vehicles to fit your family’s needs, ensuring your family vehicles, and possibly even covering vehicle, gas, and insurance costs when your child starts driving themselves.
Healthcare is one of the fastest-growing expenses that American families face. According to data from the Centers of Medicare & Medicaid Services, national healthcare spending in 2019 was roughly $11.582 per person. By adding another child to your family, you can expect your healthcare costs to increase as well.
But in addition to the annual cost of healthcare, there are, of course, plenty of upfront costs to account for. You’ll have the cost of your prenatal care and childbirth, as well as the baby’s immediate healthcare costs. You may incur other costs to get pregnant as well. The cost of fertility treatments could run you tens of thousands of dollars.
Other child expenses
There are plenty of expenses that come up during their young lives. In the baby years, you’ll have costs that include car seats, diapers, a crib and changing table, etc. In some cases, you may have furniture left from raising other children that you can reuse. But some expenses, such as diapers, you’ll incur either way.
These items may not be much in the grand scheme of raising a child, but can certainly add up in the early months and years. You’ll also have to buy clothing for your child. Again, with older children at home, you may be able to reuse some of what you already have to save costs.
Finally, many children will participate in activities including sports, music, theater, and more. These activities can also present a significant cost.
The USDA’s estimate of the cost of raising a child doesn’t include the cost of a college education. And unfortunately, those costs continue to increase.
Recent data shows that the average annual cost of attending a four-year public university is $25,864. Over the course of a four-year education, your child could easily spend more than $100,000.
As a parent, it’s not your responsibility to pay for your child’s college education, but many choose to do so. If you currently make contributions to a 529 plan or another college savings account for your child, consider whether you would be able to continue these contributions for another child. Adding another child to the family may mean making financial sacrifices, including pausing college fund contributions.
Everyone knows that raising a child is expensive. But the one cost that people often overlook is the cost to your career. Data consistently shows that women’s salaries take a hit after having a child. Women often take time off after birth. And in the United States, that time is largely unpaid.
But there are also long-term effects. Women often postpone career goals to focus on family, or even temporarily leave the workforce if the cost of childcare isn’t manageable. Unfortunately, these setbacks have serious effects and don’t just impact a woman’s earning potential today. Instead, they can impact the trajectory of her earnings for her entire career.
Before having another child, it’s important to understand the impact it may have on your career, as well as talk to your partner about strategies you can take as a family to share the load.
Before having another child, consider the impact it would have on your other financial goals. Is your family currently saving for any major expenses that might be set aside with the cost of another child?
Maybe you and your spouse were planning to retire early or save for a dream lakehouse. Another child might mean postponing — or even sacrificing altogether — those goals.
Consider the non-financial costs
There are many financial costs to consider when deciding whether or not to grow your family. Consider how another child would impact your family dynamic. What impact would it have on your marriage? How would it affect the child(ren) you currently have at home.
Another consideration is your own mental and physical health. Pregnancy and childbirth are physically taxing on women, and there’s no doubt that parenthood can challenge one’s mental health at times. It’s important to consider how it would affect all areas of your life.
Answering the question, "Should I have another baby?"
Many parents struggle with the decision of whether to have another baby. It could be that you’re feeling emotional about no longer having a baby at home, that you want a sibling for the child, or that your family doesn't quite feel complete.
Sharing these costs isn’t to argue against another child, but there’s no doubt that they bring with them a significant financial cost. Before bringing another child into your family, it’s important to weigh all the costs and consider how they would affect your lifestyle.