How Much Does It Cost To Raise A 1-Year-Old?

When you’re thinking about having children, a common question is how much it will cost to raise a child. Now that my son is almost 2, I can share how much we have spent on him this last year. Hopefully this will provide some guidance for anyone curious about the extra expenses of raising a young child.

To calculate this, I compared my family’s expenditures before and after we had a baby. You should keep in mind that the biggest childcare expense is generally daycare, but since my wife is currently a stay-at-home mom/freelance editor, we did not have to pay for daycare. However, this means we also missed out on the extra income we would have received from a full-time job, which I don’t account for here.

Average changes in expenditures per month after having a baby

	Average Change in Monthly Expenses After Having a Baby
Rent	-$64.92
Utilities	+$102.62
Groceries	+$16.28
Restaurants/Takeout	-$32.14
Auto & Renter’s Insurance	-$19.30
Health Insurance	+$65.03
Vehicle Costs/Gas	+$47.06
Household	-$125.93
Childcare	+$131.76
Total	+$120.47

Housing

Soon after my wife gave birth to our son, we realized that a one bedroom apartment was no longer big enough for our family. We decided to upgrade to a three bedroom townhouse, but the prices in our area were unaffordable. For that reason, we ended up moving out into the country where housing was cheaper but we were about 15 minutes farther away from everything. The rent on the townhouse is actually cheaper than we used to pay for the apartment, despite the much larger size, which is why our rent payments decreased after having the baby. However, our previous rent included electricity, which we now have to pay. Thus utilities have increased by more than we are saving in rent. Together, we are paying a net of $37.71 more than we used to for housing.

Food

I expected that after having a baby, we would be paying more for food, but this turned out to not be the case. We did end up paying slightly more for groceries, but this was offset by a reduction in our expenses for eating at restaurants and ordering takeout. Together, we saved $15.86 on food per month. Part of this way have been due to our efforts to consciously reduce our grocery bill, but moving further away from restaurants and the Covid-19 pandemic likely played roles as well.

Insurance

One of the biggest increases in our expenses ($65.03) was the result of adding our son to my healthcare plan. However, this also covered most of his visits to the doctor. Obviously the medical costs associated with pregnancy and giving birth are quite high, but since this article focuses on taking care of a 1-year-old, I did not include those costs in my calculations.

We actually saved some money on our auto and renter’s insurance ($19.30), but this is mainly because of an occasional reduction in auto insurance during the pandemic. I probably wouldn’t include this savings as part of my calculation, but I wanted to be thorough in the table above.

Transportation

There’s no particular reason to think that transportation costs would increase after having a baby, but ours did. This is mainly because we moved farther away from work and the stores where we shop, but also because we visited relatives more frequently (a several hour drive). This amounted to an increase of $47.06 per month.

Household and Childcare

I was pretty surprised by these categories. Household includes general purchases made to improve the living space, from kitchen appliances to lightbulbs. Childcare includes most things purchased for our kid, including diapers, wipes, clothes, toys, books, and the occasional big item like a high chair. I anticipated that household purchases would remain pretty much the same, while childcare purchases would increase dramatically. Instead household expenses actually dropped significantly, almost as much as childcare expenses increased. The net increase for the two categories was just $5.83. This is likely because of a change in mindset after having a child. Instead of wanting, say, a new blender, we now are more interested in buying things for our kid. I should note that some of our larger childcare purchases, such as car seats and a stroller, were received during my wife’s baby shower. This has kept our monthly childcare expenses lower. It also helps that we prefer to buy secondhand clothes for our son since he grows out of them so quickly.

So overall, how much did we spend on our 1-year-old?

Adding up the categories in the table, you can see that we spent an average of $120.47 per month on our child. If you don’t include the temporary reduction in auto insurance prices due to the pandemic, that would be $139.77 per month. For a year, that comes to $1,677.24. This is not too bad, especially considering the child tax credit of $2,000 we’ll receive after filing our taxes. Taking the tax credit into account, we actually ended up net positive by $322.76. Again, this is only because my wife was at home taking care of our son. If we had to pay for daycare, that cost would be much higher (at least $1,000 per month for daycare alone). We are saving a substantial amount by not paying for daycare, but we are also missing out on the income from a second full-time job. Based on a 2017 USDA report, the average amount a middle class family spends on a child per year is about $13,000. If we were paying for daycare, the expenses for our child would be in a similar range. That said, overall I found that it cost less than I expected to take care of a 1-year-old.