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article imageFinancial and social costs of raising a newborn baby dissected

By Tim Sandle     May 1, 2019 in Lifestyle
The financial and social costs of raising a newborn baby in the U.S. are considerable. But how much does it actually cost? Finance site LendEDU has released a survey of 1,000 recent parents, which reveals the likely costs that will be incurred.
Raising a newborn child is challenging for many new parents. It also draws on time, reorganization of family life, and upon personal expenditure. Many would-be parents are keen to know the general costs of a newborn baby, whether their savings will be enough and to understand the impact on having more children and careers. There will also be concerns with debt piling up, and so on.
To gain a profile of the probable costs involved, the online marketplace for a variety of financial products LendEDU has run a survey. For the survey the views of some 1,000 parents were sought and information relating to the U.S. context analysed. While U.S.-centric, the findings will be of interest globally in terms of the main patterns.
The survey reveals that, on average, the first year cost of a baby was $13,186. This is close to the U.S. Department of Agriculture estimate of $12,000. The additional analysis from the LendEDU study further breaks this figure down by expense category. One finding is where 25 percent of respondents said the first year cost of their child made up "21 to 30 percent" of their annual household income, while a further 13 percent estimated that this comprises "31 to 40 percent" of their household income.
In terms of preparing for a newborn child, the poll finds that 58 percent of respondents began saving in advance to cover the first year costs of their child, while 42 percent did not. Amongst those that saved, the average amount saved for year one was $9,331.
In terms of the impact of child raising costs, 26 percent of respondents stated they are not having anymore children due to the first year costs of the previous child, while 27 percent said they have to wait at least a few years due to the same reasons for expenditure.
In some cases the high expenditure requires people to take out loans. With the survey results, 24 percent of respondents went into debt to cover the costs of the first year, with the average amount of debt due to year one being $6,144. One reason for debt is due to one parent having to give up work. From the survey, 29 percent of respondents indicated that either they, or their partner, had to leave the workforce entirely to raise their baby, while 25 percent said they had to change jobs to increase pay.
Financial issues can place a strain on relationships. With the survey findings, 15 percent of respondents said the financial strain from year one negatively impacted their relationship with their partner. On the other side, a newborn child can help bring people together. With this, and to end the review of the data on a positive note, 37 percent of respondents said that the newborn baby had a positive impact, with the remainder indicating that their relationship remained unaffected.
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