How Much Does it Cost to Have a New Baby?

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We just had a baby! Well, three months ago, but she’s still pretty new.

Before we had her, people constantly reminded us how expensive kids are. And of course, how little sleep we were going to get. (Luckily she started sleeping through the night pretty early, so this Mommy and Daddy are pretty happy :))

But to be honest, having our daughter wasn’t nearly as expensive as I thought it would be. But maybe we just got lucky. According to a study done by March of Dimes, an average hospital stay in the United States runs up a bill of $3,500, and when you add in extra costs of prenatal care, delivery costs, and postpartum treatment, your hospital bill can quickly jump to almost $9,000.

When you’re in the hospital, it’s hard to really control your expenses, especially if there are complications. However, you can do a great deal ahead of time to minimize your out-of-pocket expenses and reduce the extra stress and anxiety of how you’re going to pay for having your beautiful baby.

I want to share what we did to prepare our finances for our new baby.

Prenatal Care: Saving Money Early

If you have health insurance, almost all of these visits and check ups will likely be covered. And since you’ll be going in for A LOT of check ups, this is really nice. Luckily that was the case for us.

If you don’t have health insurance, the costs can skyrocket pretty quickly. Without prenatal care insurance, the average out-of-pocket costs is around $2,000, according to WebMD.

Planning Ahead Saved Our Butts, and Made Hospital Bills Less Daunting

If you’ve been reading the blog for a while, it’s probably not shocking to find out that the Griffins are planners. We knew hospital bills were going to pile up, but we honestly had no idea how much everything would cost. So, we stashed away money to at least help cover our hospital bills.

The last thing we wanted was to get our hospital bills and be like, “oh crap! How are we going to pay for this!??”. Being debt free has allowed us to save more money every month, and reach our goals faster. With a baby on the way, we diverted some of our extra money into our savings account.

The other big contributor to our “We’re having a baby” savings account was a three paycheck month in September. An extra paycheck month is pretty much my favorite thing about budgeting. I never knew they existed until I created a budget, and now I can’t imagine life without them.

Since our budget operates on two paychecks each month, this extra paycheck could be put towards our Baby Fund. With everything combined, we saved $2,000 to cover any hospital bills.

We Started Talking with HR Early to Understand Maternity Leave

If you’re getting ready to have a baby, set up a meeting with HR as soon as possible. The better you understand your maternity leave, the better you can plan your finances.

We met with HR many times, and unfortunately didn’t have a great experience. The information we received was confusing and seemed to change each time we met. The most stressful part was finding out a month before our baby was due that Jenna had only 5 weeks covered by insurance instead of 6 like we had been told every other time we met with HR. This was our 4th meeting.

However, putting frustrations aside, we learned a lot that would help us plan for a lower income and adjust our budget. Here’s how it looked for us.

Jenna received 70% of her paycheck for 7 weeks since she had a c-section. My wife is the bread winner in our family, so having her paycheck reduced was a big blow. Also, to extend her time home with our baby girl, she took an extra three weeks of sick time for a total of 9 weeks.

After going through this process, we don’t know how women go back to work after only six weeks. It’s so not enough time.

The financial part of this whole process that made the biggest impact on our budget is how it affects Jenna’s paycheck AFTER she went back to work. According to our contract, we are paid by days worked and not an official salary. But since Jenna missed 35 school days, those days were deducted from her contracted work days and her salary was adjusted for her remaining contract.

Essentially what this means is that because she worked fewer days, her salary went down and all future paychecks until the end of July will be lower than normal. HR showed us the breakdown of what her new salary was, and in the end Jenna lost close to $6,000.

This has been a huge blow to our budget, and has forced us to make a few changes. I’ll talk about those in a bit.

Having a Baby Wasn’t as Expensive as We Thought it Would Be, But It Could Have Been A Lot Worse

We set aside $2,000 and that was the perfect amount of money. Our overall bills came out to $1,768.95, after insurance. We have one lingering bill of around $300 that we are still contesting because it never went through our insurance.

Looking at the in depth costs of our hospital stay, having a baby could’ve been a lot more expensive. Thank goodness we have insurance, otherwise there’s no way we could afford $16,000 + in hospital bills. There were a bunch of extra expenses that I didn’t highlight in the graph because insurance covered 100%.

Another scary piece is, Jenna had a really uncomplicated birthing experience. She needed to have a c-section to get our giant 9 pound baby out, but other than that both mom and baby were healthy. Everything was normal and expected.

I can’t imagine what a hospital stay with complications and NICU treatment looks like. I dug up a little research and the costs are through the roof. A baby requiring the NICU is likely going to be in the hospital for a longer period of time, and need more intensive care. Both of these factors increase the expenses a family takes on.

According to Managed Care Magazine, a hospital stay in the NICU of longer than four days costs between $40,000-80,000.

We Adjusted Our Budget to Fill the Gaps and Still Meet Our Goals

Budgets are made to be tinkered with and adjusted. With Jenna being on maternity leave and bringing home less money, we had to make changes in our budget.

The first component is that Jenna is going back to work at her second job earlier than we anticipated. Our original hope was to hold off until the end of June or even July. Sadly, she’s going back this week. It just makes good financial sense to keep us moving toward our goals and make a little hay before childcare costs kick in come August.

Secondly, we tightened up the budget quite a bit. We reduced our spending in our date and community funds by a total of $75. It still allows us to invest in each other and in our friends, but we need to be more intentional and strategic.

We’re also being more frugal with food and gas. During the school year we got in the habit of buying fancier food and more luxury food, so it’s as simple as cutting those items out and sticking to the basics. And I’ve started biking to work and around town more to save money on gas. Plus I’m getting good exercise. 🙂

Lastly, our budget now has less wiggle room to buy extra things we’ve been enjoying like going out to eat more, updating our wardrobes, and now that we have Addy, cute baby stuff.

It’s SOOO hard to resist buying cute baby clothes. Everything is adorable! We’ve only bought a couple things like a baby swimsuit and summer hat, but I’m convinced that if you can walk through a store and resist the temptation on a regular basis, I daresay you’re a superhero! The baby section at Target is my wife’s kryptonite. She ooos, and ahhhhs over almost everything she sees.

Every Hospital Experience is Different

I am really thankful for our low key, pretty normal hospital stay. We had a few quirks pop up, but everyone was happy and healthy. There are so many variables that can affect your hospital bills from insurance coverage, length of stay, health of baby and mom, and whether your baby is full term or not.

There’s no one size fits all, and our next child could be very different. Not to mention our insurance drastically changed this week, but that’s a conversation for a different time. 🙂

Let Me Know in the Comments

How did you plan for the costs of a new baby?

Our budget and goals changed our lives and it can change yours too.

As an Educator and Personal Finance Blogger, Jamie has helped hundreds of families learn how to budget, save money, and pay off debt (go here to subscribe and start your debt free journey). Read our debt free story, “How We Paid Off $73,000 of Debt in Less Than Four Years”.