The Real Costs of New Babies

The First Year

According to the latest estimates, the first year of a baby’s life can run anywhere from $10,000 to $20,000 in the U.S.—and that’s just for the basics. We're talking:

• Diapers & Wipes: Up to 3,000 diapers in year one alone. That’s $70–$90 per month.
• Formula & Feeding Supplies: If breastfeeding isn’t an option or you supplement, formula costs can reach $1,500+ per year.
• Gear: Cribs, car seats, strollers, monitors. Many new parents spend $2,000–$3,000 just getting set up.
• Childcare: The single biggest cost. Full-time infant care averages over $1,200 a month in many states—more than some college tuitions.
• Healthcare: From delivery to pediatric visits, even with insurance, out-of-pocket medical expenses can easily total a few thousand dollars.

Hidden (But Real) Costs

• Lost Income: Parental leave often isn’t fully paid, especially in the U.S. Many parents take a temporary hit to income during this crucial time.
• Housing Upgrades: That one-bedroom apartment might not cut it anymore. A bigger place—or baby-proofing your current home—adds another layer to your budget.
• Mental Load: Budgeting for a baby isn’t just financial. The emotional and logistical overhead is real. Sleep deprivation has its own cost.

How to Save Without Sacrificing

New parents are often told they need everything—but the truth is, babies need less than the market suggests. Here’s how to trim the bill without cutting corners:

• Warehouse Club Memberships: A membership at a store like Costco can pay for itself quickly. Diapers, wipes, and formula are often nearly half the cost compared to standard retailers—and the quality is consistently excellent.
• Hold Off on Formula If you are able to breast feed this can be a significant savings over buying formula and added bonus, breastfeeding gives more healthy bacteria and probiotics to help babies gut biome form and on top of that breastfeeding can even help with dropping that baby weight.
• When Your Baby is Ready for Solids Skip Pouches and Pre-made meals:  Pouches are great for on the go, but their costs are significant costing sometimes over $3 per pouch, over $2 for jarred foods and over $5 for pre-made meals. Check out some of our recipes and videos for preparing batched foods for easy healthy meals for little ones at a fraction of the cost. For example we made over 40 servings of chick peas for less than $2 total! That's less than 5 cents a serving and has excellent protein, iron and other vitamins and minerals for your baby.
• Prioritize Quality Over Quantity: Invest in clothing and gear that are built to last through frequent use and multiple washes. A few well-made essentials go further than a closet full of novelty. Sign up for Hammer & Rattle's newsletter to get 10% off your first order of thoughtfully made apparel and accessories for babies, toddlers, parents and everyone in between.
• Skip the Fancy Stuff: Wipe warmers, designer swings, and high-end gadgets often end up collecting dust. Stick to items that deliver daily value.
• DIY Where You Can: Making your own baby food, using cloth wipes, or even tackling simple repairs on gear can add up to serious savings.
• Smart Registry Planning: Don’t just list the cute stuff—include essentials like diaper subscriptions, nursing supplies, and practical, high-quality apparel.
• Use Benefits: Look into Flexible Spending Accounts (FSAs), tax credits like the Child Tax Credit, and employer-provided resources such as dependent care assistance or lactation support.

Raising a child doesn’t have to break the bank. With a little strategy and focus on what really matters, you can manage costs while still giving your baby a beautiful beginning.