Baby, You’re Expensive!

The Duke and Duchess of Cambridge have a lot on their plates these days with the arrival of Prince George. Unlike most people, William and Kate do not need to worry about the financial costs and the 1,200 royal staff should also help ease the burden. For the rest of us, starting a family can be a huge financial challenge. Between home preparation, long nights, diaper changes, and feedings, parents can easily overlook the endless tab they are about to rack up thanks to their new little bundle of joy.

A million dollar baby is probably a stretch, but over the 18+ years you raise your child, you might come close. In the U.S., the average cost for a baby’s first year comes out to about $26,000 if you upgrade your house, use daycare, have insurance and buy the typical things parents buy. This report will present these costs throughout the United States to help prepare you for the financial side of raising a baby.

Cost of a baby's first year in the United States

In our analysis, we broke down costs into five main categories:

  • Housing – Cost of an additional bedroom in your city
  • Childcare - Cost of 9 months of infant childcare in your city
  • Healthcare - Out-of-pocket expenses for prenatal, childbirth, and first year
  • Baby items – Cost of diapers, food, toys, strollers, and other supplies
  • Energy - Additional cost for more laundry, a warmer house, drives to see family

Housing

Accommodating a kid or two will require something more than your two bedroom condo at the center of the the city. We have calculated the average cost of upgrading from a two-bedroom home to a three-bedroom home in your city. The average cost of an additional bedroom is about $86,000 or about $7,600 per year in additional mortgage payments (on a 30-year fixed 4.5 percent loan). San Jose is the most expensive place in the nation with an additional bedroom costing $225,000 or $20,000 per year. On the other end of the spectrum, an additional bedroom in Las Vegas will only run you $44,000, or $4,000 per year.

Childcare

Childcare is another hefty bill. Redfin combined National Association of Child Care Resource and Referral Agencies childcare costs by state with childcare worker salaries by metro from the Bureau of Labor Statistics to get a more localized estimate of childcare costs by city. Since childcare doesn’t typically start until the baby’s third month, we estimated childcare costs for nine months of the year. Throughout the nation, infant childcare costs on average around $1,000 per month, or about $9,000 for the first nine months of care. Boston leads the country in childcare costs at $14,400 for the first year, and Atlanta is the most affordable at around $5,000 for the first year of care.

Healthcare

Healthcare costs are the great wildcard for babies in the United States. Your geographic location, choice of maternity hospital, insurance status and medical complications can all have a huge impact on the cost of pregnancy and childbirth. Costs can vary from hundreds of dollars for the well-insured to tens of thousands of dollars for the less-insured or uninsured. For the purpose of this analysis, we have chosen a flat $3,000 out-of-pocket cost for a new baby based on a study by Childbirth Connection from January 2013. Although healthcare costs will vary by city, it was difficult to decipher the magnitude using publicly available data. The best data we could find was courtesy of the Center for Medicare & Medicaid Services, but unfortunately it does not include any obstetrics related healthcare costs.

Baby items

Now we’re getting to the costs with which parents are most familiar with. These costs are incurred when you go to the store and pick up a few items for the baby’s new room, or head down to the drugstore to stock up on diapers. Once again, we chose a flat cost here based on Baby Center’s cost calculator. The cost of baby items during the first year is estimated to be $5,500, but can vary based on how many gifts or hand-me-downs you get, as well as general costs of goods in your area.

Energy

Energy costs might not be too substantial compared to the costs above, but they can add up depending on the season, and your location. You’re going to be home more, and you’ll probably have the heat or the air conditioning on a bit longer to keep things comfortable for the baby. You’ll also be making a few extra trips to the store or to see grandma and grandpa. We’re estimating this cost based housing costs supplied by the US census. For the first year, these costs vary from $500 to $1000 depending on your city.

Location, location, location: Cost of a Baby’s First Year by City

Some cities cost more than others for housing, childcare, and energy, while baby items and healthcare are constant. We’ve broken out these first year baby costs by city to give you an idea of what a new baby will cost in your area.

Cost of baby's first year in select US cities

As you can see, having a baby is an expensive endeavor. If you’re not lucky enough to have a staff of 1,200 help you out like Kate Middleton and Prince William, you can still possibly look for a city to call home that tops this list of first year baby costs order by affordability. While this analysis might be a shocker for those sans bébé, as most parents will tell you, the extreme sleep- and cash-deprivation are worth it. We promise.

Cost of a baby’s first year sorted by affordability

Metro Area Total Cost
Chart
Total Cost Housing Child-
care
Baby Items Health-
care
Energy
1. Atlanta, GA
 
 
 
 
 
$18,500 $4,500 $5,000 $5,600 $3,000 $500
2. San Antonio, TX
 
 
 
 
 
$18,700 $4,100 $5,600 $5,600 $3,000 $500
3. Las Vegas, NV
 
 
 
 
 
$19,500 $3,900 $6,500 $5,600 $3,000 $600
4. Houston, TX
 
 
 
 
 
$19,700 $4,900 $5,600 $5,600 $3,000 $600
5. Durham, NC
 
 
 
 
 
$21,100 $5,500 $6,500 $5,600 $3,000 $500
6. Miami, FL
 
 
 
 
 
$21,300 $6,600 $5,500 $5,600 $3,000 $700
7. Austin, TX
 
 
 
 
 
$21,700 $6,100 $6,500 $5,600 $3,000 $600
8. Phoenix, AZ
 
 
 
 
 
$22,000 $6,200 $6,800 $5,600 $3,000 $500
9. Charlotte, NC
 
 
 
 
 
$22,100 $6,500 $6,600 $5,600 $3,000 $500
10. Salem, OR
 
 
 
 
 
$22,400 $5,500 $7,900 $5,600 $3,000 $500
11. Raleigh, NC
 
 
 
 
 
$22,500 $6,800 $6,600 $5,600 $3,000 $500
12. Philadelphia, PA
 
 
 
 
 
$22,600 $5,200 $8,100 $5,600 $3,000 $800
13. Hagerstown, MD
 
 
 
 
 
$22,600 $4,600 $8,900 $5,600 $3,000 $500
14. Bremerton, WA
 
 
 
 
 
$22,700 $5,100 $8,500 $5,600 $3,000 $600
15. Greeley, CO
 
 
 
 
 
$23,300 $3,800 $10,500 $5,600 $3,000 $500
16. Trenton, NJ
 
 
 
 
 
$24,000 $6,100 $8,400 $5,600 $3,000 $1,000
17. Stockton, CA
 
 
 
 
 
$24,100 $5,900 $9,200 $5,600 $3,000 $500
18. Fort Collins, CO
 
 
 
 
 
$24,400 $5,500 $9,900 $5,600 $3,000 $500
19. Riverside, CA
 
 
 
 
 
$24,500 $5,600 $9,800 $5,600 $3,000 $500
20. Modesto, CA
 
 
 
 
 
$24,500 $6,700 $8,600 $5,600 $3,000 $600
21. Chicago, IL
 
 
 
 
 
$25,500 $5,900 $10,300 $5,600 $3,000 $800
22. Baltimore, MD
 
 
 
 
 
$25,600 $6,400 $9,900 $5,600 $3,000 $700
23. Portland, OR
 
 
 
 
 
$25,800 $8,000 $8,700 $5,600 $3,000 $600
24. Sacramento, CA
 
 
 
 
 
$26,300 $8,000 $9,200 $5,600 $3,000 $500
25. Providence, RI
 
 
 
 
 
$26,700 $7,400 $10,000 $5,600 $3,000 $800
26. Salinas, CA
 
 
 
 
 
$27,300 $7,800 $10,300 $5,600 $3,000 $600
27. Boulder, CO
 
 
 
 
 
$27,300 $8,400 $9,800 $5,600 $3,000 $500
28. Seattle, WA
 
 
 
 
 
$27,400 $9,000 $9,100 $5,600 $3,000 $700
29. Denver, CO
 
 
 
 
 
$28,200 $7,700 $11,400 $5,600 $3,000 $500
30. Worcester, MA
 
 
 
 
 
$28,700 $6,300 $13,200 $5,600 $3,000 $700
31. Washington, DC
 
 
 
 
 
$29,800 $9,300 $11,200 $5,600 $3,000 $700
32. Los Angeles, CA
 
 
 
 
 
$30,100 $10,600 $10,400 $5,600 $3,000 $600
33. Oxnard, CA
 
 
 
 
 
$31,400 $12,100 $10,100 $5,600 $3,000 $600
34. Santa Rosa, CA
 
 
 
 
 
$32,000 $11,800 $11,000 $5,600 $3,000 $600
35. San Diego, CA
 
 
 
 
 
$32,700 $13,300 $10,200 $5,600 $3,000 $600
36. Boston, MA
 
 
 
 
 
$34,000 $10,200 $14,400 $5,600 $3,000 $900
37. San Francisco, CA
 
 
 
 
 
$35,900 $15,300 $11,400 $5,600 $3,000 $700
38. New York, NY
 
 
 
 
 
$36,700 $13,400 $13,700 $5,600 $3,000 $1,000
39. Santa Cruz, CA
 
 
 
 
 
$38,800 $19,700 $9,900 $5,600 $3,000 $600
40. San Jose, CA
 
 
 
 
 
$41,600 $19,900 $12,600 $5,600 $3,000 $600
Table Legend
Housing
Childcare
Baby Items
Healthcare
Energy
 
 

Discussion

  • confused

    is this by CBSA or MSA or County? coz it doesn’t make sense that San Jose is more expensive the San Francisco…

  • urbanmama

    Don’t see that the price of private schools was included here. If you include the price of K-High school private school in urban areas then cities like San Francisco will be at the top of the list. Hence why most new parents move out of the city, they can’t afford it.

  • Tommy Unger

    Good question, C.

    We used the following, courtesy of the US Census:
    San Francisco-Oakland-Fremont, CA MSA
    San Jose-Sunnyvale-Santa Clara, CA MSA

    Indeed, the San Francisco/Oakland/Fremont is both larger and more economically diverse than San Jose/Sunnyvale/Santa Clara and lead to being cheaper. But if you are in San Francisco proper, odds are you will be paying much above the metro area average.

  • bogtrotter

    yup- oakland and fremont have more in common with detroit or cleveland than they do with san francisco

  • tex

    The average monthly childcare costs for a baby in San Francisco is $1900 ( Chronicle article from 3 years ago so it may have even gone up) so it seems that $11400 that is listed is way off. Im about to have a baby and I have not found anything less then $1500 a month in the city. Somebody let me in on where you got that $11,400 grand figure cause I want to sign up and so do all the other new parents in San Francisco!

  • Chicago Mama

    So, what does this suggest about families that are raising a child (or two) in a two-bedroom condo … that we’re defying the odds? Give me a break. We live in a two-bedroom condo in Chicago and have a two year old AND a dog. It’s crazy we’ve lasted this long, eh? Plus, if we absolutely had to upgrade to have more space, we could find a 3-4 bedroom HOUSE in the SAME CITY for the SAME PRICE as our condo, just a different neighborhood. Your “study” is flawed and will only serve to scare new and expecting parents who have enough to worry about already.

  • likediablo3

    have insurance and buy the typical things parents buy. This report will
    present these costs throughout the United States to help prepare you
    for the financial side of raising a baby.

  • theSamLowry

    There’s definitely something wrong with this chart. Santa Cruz may be expensive, but it is nothing like NYC or SF.

  • moionfire

    The housing cost and upgrades for the child is greatly exaggerated.

    • Audrey Lawrence, Redfin

      It is indeed possible to keep costs lower than the average we projected, but many people want more space to grow their family and need to send their baby to day-care, all which carry significant costs (around $26k per year). This Redfin study also focused more on the large US cities. A baby’s first year and a housing upgrade will likely be cheaper in the smaller towns across America.

  • Twin momma

    Someone please tell me where in atlanta the day care cost are 5000 per 9 months… Everything I find is at least 1200-1400/ month.