How Much Does It Cost To Raise A 3-Year-Old And A Newborn?

Everyone knows that kids are expensive. In addition to the cost of daycare or the loss of income staying home to care for a child, there is also another mouth to feed, another body to clothe, and activities needed to entertain. This all adds up. But how much exactly does this all cost? There are a lot of factors to consider, but one important one is age. I previously shared how much it costs to raise a 1-year-old and a 2-year-old. Last year (2022), my son was 3, and my wife and I also had another baby. So now I can share how much it costs to raise both a 3-year-old and a newborn at the same time.

To calculate this, I compared my family’s expenditures before and after we had a baby and from 2021 (age 2) to 2022 (age 3 + newborn), which you can see in the table below.

For context, 2022 was a big year for us. We moved from Pennsylvania to Maryland and bought a house. I left out the moving costs and the costs of the homebuying process since I didn’t feel they represented typical expenses. However, some of the costs associated with setting up the house are still included and described below where I felt they made sense.

Average Changes in Expenditures per Month for a 3-Year-Old and a Newborn

Average Monthly Change from Pre-Baby to Age 3 + 0Average Monthly Change from Age 2 to Age 3 + 0
Auto & Renter’s/Home Insurance+$94.51+$91.12
Health Insurance+$169.81+$108.62
Vehicle Costs/Gas+$87.10+$22.43

Housing and Utilities

The mortgage for our house is actually lower than the rent for our townhouse (although only because we made a significant down payment), but if you include property taxes, it is more expensive. That said, it is still cheaper than the apartment we used to live in before we had kids. That rent included utilities, though, so our total housing cost is still up $18 including the utilities we now have to pay. From 2021, our utilities cost is actually down since we no longer pay for cable, but including mortgage, property taxes, and utilities, our total housing cost was still up $19.82.


Our grocery bills were up slightly from before we had kids, but we spent much less at restaurants in 2022, resulting in a decrease in food costs of $27.45. From 2021, grocery costs were down, since we shop at a cheaper grocery store in Maryland, and restaurant costs were also down, since it’s harder to eat out with an infant. Together, there was a decrease in food costs of $36.82.


2022 had a large increase in insurance costs. First, homeowner’s insurance is significantly more expensive than renter’s insurance. Second, adding another child to our health insurance plan increased our premiums. And third, we had to switch from my graduate student health insurance plan to my wife’s company’s health insurance plan, which was about double the cost. Altogether, we paid an average of $264.32 more per month than before having kids and $199.74 more per month than in 2021.


Transportation costs were also up in 2022, even excluding moving-related costs. The largest costs were getting the windshield replaced on my wife’s car and fixing the heat in mine. This resulted in an increase of $87.10 from before we had kids (when we lived only a 5 minute drive from work) and $22.43 from 2021.

Household and Childcare

Household and childcare costs were both up substantially in 2022. Many of the household costs were the result of fixing up our new home. We got new carpets in the bedrooms (which we thought was particularly important for the new baby, who’d learn to crawl on them), paid for some plumbing work that needed to be done, and purchased some things for around the house (paint, ladder, etc.). While these may not be expenses we need to pay every year, there will always be upkeep costs that need to be paid, so I figured I should still include them. Childcare costs were up because my son attended daycare 3 days a week for the first 3 months of the year and then preschool in the fall. Together, household and childcare costs were up $606.97 from before we had kids and $488.17 from 2021.


Clothing and beauty costs were down both from before having kids ($121.13) and from 2021 ($32.87). We were pretty busy with the house and new baby, so I guess we didn’t end up spending much in this category.


Medical costs were higher from before having kids ($185.50) and from 2021 ($186.78). Part of this is due to the medical costs of having a baby, and part is due to the constant colds and occasional fevers we all had starting in September and continuing until just about a week ago (March of 2023).

Entertainment and Travel

Entertainment costs were up in 2022 as we finally started getting out of the house to entertain our 3-year-old. We bought a zoo membership, went to the aquarium, and participated more actively in holidays. Travel costs were still down, though, since we did not take any trips. Together, our costs were down $110.81 from before having kids but up $28.55 from 2021.

So Overall, How Much Did We Spend on our 3-Year-Old and Newborn?

In total, our expenses were up $902.50 per month from before having kids and $875.50 from 2021. That’s approximately $10,500 to $11,000 for the year. Even including the $2,000 per child tax credit, that’s still between $6,500 and $7,000. This was the first year that our expenses significantly increased after having kids and is likely a preview of even higher costs in the future, especially as we start to travel again for vacations, the kids begin eating more, and our entertainment costs increase. Hopefully at least our medical costs will go down since we will no longer have pregnancy-related expenses, and childcare costs will decrease when our kids start attending public school, but that is still a few years away. In the meantime, we will see how our expenses change in 2023.


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