- Before you have kids, it's worth knowing the true costs of parenthood. Business Insider talked to financial planners who are parents themselves to find out what expenses they didn't see coming.
- From the medical costs of childbirth to feeding another mouth, the basic expenses add up quickly.
- Sending them off to school, even kindergarten, can be expensive. And before school even starts, childcare is a major expense.
- All the things that make kids' daily lives fun can also get quite expensive for parents, from toys and books to sports and summer camps.
There's no doubt about it:
Almost every aspect of having a child costs money, from the day the baby is born to the day they go off to college. Even after that, many parents spend money on their children long-term.
But, many parents would also say there's no dollar better spent. While having children isn't all about financial planning, money is an important consideration for anyone considering becoming a parent.
Financial planners with children of their own weighed in on the biggest surprise expenses they've seen so far — here are the seven expenses that stood out.
1. Giving birth in a hospital is incredibly expensive, even with insurance
When financial planner Crystal Rau of Midland, Texas found out she was pregnant with twins in 2009, she didn't realize how much it would cost to actually have them. "Nobody told me that when you go in to have a baby, that I was going to be charged for two deliveries, even though it all happened at the same time," she said. "I got charged for two deliveries and pretty much double for everything. We weren't expecting that at all."
Not all new parents are having twins and paying for two deliveries, but that doesn't change the fact that even one birth is expensive, even with insurance. The average birth costs $10,808 without any complications.
2. Paying for another mouth to feed makes costs add up
Rau says that another big expense came up after trying baby formula: she had to buy special formula for her twins. "It turns out they had a milk protein allergy," she said. "And so I had to buy this specialty formula, which was like $40 for a little canister."
But even after children are eating regular food, the cost of extra mouths adds up. Mark Struthers of Sona Wealth Advisors, who has two boys ages 13 and 15, says it only gets more expensive. "The general food budget increased more than I thought. My wife was more focused on organic food," he told Business Insider in an email. "Along these lines, the cost of eating out was more than expected. Even when little, restaurants still added up."
3. Not even public school is free
Private school education for children, even in elementary and high school, can be as expensive as college in some parts of the US. But financial planner Pamela Horack of Pathfinder Planning says that even public school costs add up. "I realized that public school is not free," she told Business Insider by email.
Before her child's first day of kindergarten, she "received a supply list to purchase: paper, crayons, glue sticks, as well as a nap mat and a variety of other daily materials. Teachers also requested classroom supplies such as paper towels, hand wipes, and tissues."
And the expenses didn't stop after supply shopping. "Then, we had to pay a 'snack fee' for the kids, fund their lunch account, pay for PTA membership, buy a class T-shirt, and support the booster club."
"All in, I spent about $700 in the first few months of school," she said. As a financial planner, she encourages her parent clients to start saving. "I coach all my parents to create a school account where they can set aside a few dollars each month to save up for these surprise expenses."
4. For working parents, childcare is a major expense
"Daycare costs, I think, are a lot higher than what they used to be," says financial planner Travis Tracy of Fortitude Financial Planning. "I'm in Durham, North Carolina, and that's where we had had our little girl in [daycare] for about a year. We were paying about $1,000 a month, and that was with a discount," he said.
A 2016 study found that the cost of childcare was higher than the cost of college in more than half of US states. While the cost varies greatly across the country, it's still a large expense that could continue for many years.
5. Doing all the fun things that kids want to do comes at a cost to parents
The sports, birthday parties, summer camps, and play dates all cost money — and it's up to the parents to fund them.
Financial planner John Bovard of Incline Wealth has four kids, two of whom play sports. And these expenses have started to add up. "Last spring, I think I was pushing $600 just for two baseball teams, and that was not expected," he told Business Insider. "There are just a lot of unexpected costs that come along with sports. You have your normal registration fees and league fees. But then there are certain cleats ... for football, it's mouthpieces and chinstraps, and then balls and bats."
Even without sports, social activities cost money. "It could be twice a month where your kids are going to birthday parties and you're shelling out $20 to $25 each time they go to a party," Bovard says. "Those expenses catch us off guard; they're hard to budget for."
6. Buying all the things that keep them busy adds up
During the coronavirus pandemic, financial planner Miguel Gomez says that his spending has shifted from evenings out to entertaining his kids at home. "With kids at home, it's been interesting to see the shifts that have occurred in our family budget. Dining out is almost nonexistent, and toys now occupy an important part of it," he told Business Insider in an email.
"My older one loves books. She devours them. With public libraries closed — and after spending a small fortune in bookstores — I had to find something to help her keep engaged in her reading," he said. Luckily, he found an app that helped cut back on that expense.
But, all of these things are recurring expenses that come up, pandemic or not.
7. Medical care is expensive, even for children
Kids tend to get hurt, get sick, and, in general, need to visit the doctor's office. On top of the cost of health insurance for a whole family, the extra copays, medicine, first-aid supplies, and other medical costs add up. For older children, braces, glasses, and contact lenses are also a big expense.
"Things like the dentist, even when they have baby teeth, is expensive," Bovard says. "We've got a bill right now for $1,500 for my oldest kid, that's two cavities and a crown."