The Truth Behind Children and Family Finances

A report from the government has made it official: Babies are expensive. But did we really need a report to tell us that? A lot of us pop out babies without really thinking of the new financial responsibilities children will bring. According to data compiled by the U.S. Department of Agriculture (USDA) and updated to today’s dollars using the Consumer Price Index, the typical middle-income couple will spend at least $883 a month on their baby for the first 24 months – and the costs only climb after that.

Consider that in metropolitan areas such as New York, Chicago, and San Francisco, the expenses are likely even higher. If that were your car payment, you could be driving a Mercedes. But if there’s a baby in your future, you’ll be spending that money on more important things, like health insurance, food, daycare, and diapers. In fact, according to the USDA, a middle-income couple could spend about $200,000 by the time the child is 18.


Whether your baby is well on its way or just a twinkle in your eye, you need to take a hard look at your family finances – and the sooner the better. No matter what your situation is today, it’s about to change. You’ll have to make some decisions and come up with a plan.

The first thing you should do is estimate your current living expenses. Keep track of all your costs, including rent or mortgage, utilities, clothing, food, insurance, transportation, and entertainment. Then compare it to your monthly income and see what you have left over. If it’s less than $800, you’ll probably have to start cutting back.

You’ll also need to think about how the baby will