Our Baby Has Made Us Money

The U.S. Department of Agriculture has recently estimated that the cost of raising a child from birth to age 18 now sits at $245,000. The estimates range from $455,000 for high-income northeast families to $145,500 for low-income rural families. Those USDA estimates do not include the cost of college, which I’ve heard is now not only entirely unaffordable, but it also is a seemingly complete surprise to every family when the cost finally comes due. (Well Honey, Janie graduated high school today…how will we pay for college?)

I suppose, though, that college costs are a fair omission, given that only two-thirds of high school graduates even enroll in college and only 22% of those students have their parents cover tuition. But still, nearly a quarter-million bucks just to get a kid outta the house? I feel like I must be doing something wrong, given that our daughter has actually made us money.

Our daughter is the stinkin’ cutest baby that ever walked the earth. Last February (2014), Jesus was up in heaven handing out cuteness to all the new babies. We’re convinced our baby snuck in and took it all while Jesus was out on a smoke break. Even with all the cuteness, though, the baby hasn’t scored any modeling contracts or Gerber commercials. So, how is it possible that the baby is actually making us money? Well, look no further than taxes.

Baby29 turned a year old last month. We took an amazing sightseeing trip to the Statue of Liberty and Ellis Island on a Wednesday morning and afternoon.

Side Note: Let me just say that if you ever want to sightsee in New York, do it on a Wednesday in January—we quite literally had the place to ourselves. There were more park rangers looking to tell stories and history than there were ears to listen to those stories.

After a year of life, and because I track all my expenses each month, I can garner a good estimation that we’ve spent around $1,758 on the baby in her first year, just under $150/month. (Two months into the second year of her life, and that number has actually fallen.) That’s money for diapers, wipes, food, medicine, hospital bills, toys, shoes, clothes, and anything else that I could reasonably discern from my credit card statements as “baby-related.” Granted, I’m not perfect. We might have bought some peas or juice or yogurt that we fed the baby that got bundled into our “food” category. As such, I’ll go ahead and say we’ve spent $1,900 on the little one ($160/month). Our medical insurance doesn’t change as a result of adding a child.

Contrast those expenses, though, to what the baby has saved us in taxes. Our $3,950 federal exemption in the 25% marginal tax bracket has saved us $987.50. The child tax credit paid us $1,000. The Virginia state exemption of $930 in the 5.75% tax bracket saved us another $53.50. The tax savings then is $2,041.

Adding it up…

First- Year Spent: $1,900
First-Year Tax Savings: $2,041
Baby Profit: $141

I’ve said before that I often play fast and loose with the numbers, and anything with taxes involved is never as cut and dry as what I’ve done here. But, it’s close. And, we haven’t even started down the path of other savings. We currently live in New York City, in Manhattan (Update: Not Anymore!) If we didn’t have the baby, I’m certain we would be doing more plays, movies, bars, clubs, comedy shows, tours, etc. The fact of the matter is, “entertainment” in the traditional sense is just inconvenient with a baby in tow. Our idea of entertainment since living in Manhattan has been:

  • Going to Central Park (or other parks) twice each weekend for picnics and walks.
  • Watching free concerts that sprout up on street corners.
  • Enjoying a $12 bottle of wine on the roof of the building.
  • Dancing and Singing in the apartment. See this video for me and baby dancing.
  • Watching parades, marches, and rallies (there’s one every day it seems…)
  • Walking through Times Square and gawking at all the craziness.
  • Doing volunteer events (like senior home visits) and fitness activities (5k run/walks) through my work.
  • Lots of other free/cheap things like taking photos, reading books, teaching her about the stock market, grocery shopping, and much more.

We don’t feel deprived that we aren’t spending more money on the baby at $1,000 Gymboree parties or just general “shopping”. I don’t think the baby feels deprived, either.

Now, let me address some ensuing complaints in my logic. My wife is a stay-at-home mom (SAHM), so there’s an opportunity cost for her not working. However, we just don’t need her to work. We’ll retire at 34 (less than five years) even with her not working. If she worked, we’d pull in that date by 2 or 3 years. That would be sweet, but not really necessary. Plus, daycare was never an option for us. We both had SAHMs growing up and we couldn’t imagine dropping off the little one for some other person to raise for 70% of their waking hours. That’s our kid, raising her is our responsibility—that’s at least our value system, no disrespect if it’s not yours.

Also, I know the first year of a child’s life is probably going to be the cheapest—we won’t for long be profiting on this endeavor. We did get a fair amount of “baby stuff” from friends and relatives to help get us started. Also, we don’t have to pay for a baby to: ride a bus (except, insanely, BoltBus charges for infants), get on a subway, go to school, play sports, and the list goes on. I know there will be costs for clothes, going to the zoo, actual food, and the list is endless. But, the point remains: to a large degree, children are as expensive as you want them to be. If you want to turn them into little consumer-driven materialists, then you’ll probably have an expensive kid. However, if you value time and experiences, rather than stuff, and you parent smartly, then I see no reason why your net costs of child-rearing should exceed $50k or so for the first 18 years of life. (That’s $300/mo in expenses after you back out tax savings).

According to the moms at BabyCenter, just the first year of a child’s life will cost, on average, $10,000. Seeing as we made money, what the heck are we doing differently?

A Few Ways To Be a Fiscally Smart Parent

In addition to the many experiences that I mentioned above as ways we’ve found to spend quality time with Baby29 without needlessly spending money, we’ve done a few other things that I think have saved us significantly.

Baby Bullet

The baby was exclusively breast-fed for the first six months or so (you can’t beat free). After that, we started using a baby bullet (a gift from Grandma). This can be had for $40-50 on Amazon. After 6 months of age, and certainly when teeth start coming in, you need to start introducing solids. Check out Alaska Dental Associates blog post for some practical tips how to keep your teeth healthy. The quantity a baby will eat ranges greatly, but between 6-12 months, the baby will eat anywhere between 4 to 12 ounces  of food per day (more for voracious, bigger babies, of course). An ounce of Gerber food will run you about 20 cents. Not bad. However, buying a bag of frozen vegetables and baby-bulletin’ it will run you only 3-4 cents per ounce.


Which Would You Prefer. Baby Bullet Peas (Right), or Gerber's Finest (Left)?
Which Would You Prefer. Baby Bullet Peas (Right), or Gerber’s Finest (Left)?

And, it tastes and looks WAY BETTER. It also takes less time than you think. Steam the vegetables in the microwave or on the stove, a minute in the bullet, and wham, delicious food. Doing this also will save $30-40 a month, depending on how much the little champ eats. After all our kids are onto real food, then we can just sell the device (along with everything else baby-related).

The Greatest Toy on Earth

Last Christmas, the baby opened up her first present ever.

As can be expected, she was far more enamored with the wrapping paper itself than she was with the contents therein. Our baby has an obsession with what we call “non-toy toys.” I’m guessing this is common. This is fine to some extent, but you need to be careful. Paper/cardboard will get eaten. Little items can be swallowed, and other things just might not be sanitary.

So, my wife developed seriously the greatest toy to hit the 6 to 18-month-old generation since…ever. Here’s a picture of it:

World's Greatest Toy
World’s Greatest Toy

The patent is pending, but, yep, it’s a container with a bunch of stuff in it. Here’s how to make it:

  1. Get a container. We used a baby snacks container, but anything similar works (tennis ball container, big red SOLO cup, crown royal bag, extra container for baby wipes, etc.).
  2. Fill it with stuff. You’ll see in the photo we have a bottle of hotel mouthwash, a chip clip, an old medicine container, a photo of her cousin (babies can’t eat photos), and a couple plastic slinkies I got from an office Halloween party. Nary a choking hazard to be found.
  3. Sit back and watch the baby repeatedly and for hours-on-end hone their grabbing skills, sense of object permanence, and spatial recognition by putting things in the container, pulling them out, and putting them back again.

Other Toy Options

What’s that you say? You don’t have any containers in your house? Well, here are two other great toy ideas.

This is a box, kids love boxes. Kids especially love boxes that are filled with newspapers. I’d recommend using “junk mail” newspaper sections because the normal newspapers will have a lot of ink transfer onto babies skin and clothes. Babies will sit with the paper, tear it apart, throw it off to the side and repeat until there is no more paper. Then, they’ll reach out and pull the paper back in again. It’s a beautiful thing.

If you don’t want to mess with little paper scraps, then another great option is to toss the little one in a basket of clean laundry. I’ve been known to put Baby29 in the laundry basket, go out and catch a movie, and by the time I’m back she’s still goin’ strong (not really, but almost).

Now, you might be sayin’, “You guys are terrible parents. Your kid is playing with paper, boxes, and old food containers.” And you know, you’d be completely wrong. Why? You know the difference between a $19.99 toy where babies take blocks and put them in a container, and our container of safe household items? The difference is branding, colors, and nineteen dollars and ninety-nine cents. Both devices accomplish the same ends. The most fun a baby has is playing games, reading, dancing, and talking with parents. Babies don’t need a bunch of crap that will undoubtedly spend 99.99% of its time in a box.

And one more…

Now, I’m not advocating for going out and buying a billiards table so your baby can get an early start hustlin’ tavern-goers. However, if you already have a pool table at your disposal, then this is an absolutely awesome toy for those at-or-around a year old. I only know this because I often escaped with the baby to our building’s amenities area to spend some quality father/daughter time away from mommy. They had a pool table there and, let me tell ya, it’s amazing. You sit the baby at one end of the table and stand behind her. Then, you gently toss balls all around the table. It’s educational (look baby, a yellow solid ball, it says the number 1!). It helps grabbing, stopping, and spatial skills. And (most importantly) it’s fun for adults too–meaning you can play with the baby even longer!

Amazon Mom

In a perfect world, you wouldn’t have to buy anything. However, this is not such a place. In a very good world, however, you have Amazon Mom. Amazon Mom is a subscription service offered through Amazon.com whereby you subscribe to the items you’re going to buy anyway, just at a 20% discount. If you use this link to sign up, I get a $10 credit, but don’t feel obligated.

We could do much better financially if we went with reusable diapers, but we haven’t crossed that bridge yet (maybe for Baby #2). So, we use Amazon Mom for wipes and diapers, but you could also use it for baby soap, powder, formula and much more. Plus, if you use Amazon’s Rewards Visa then you’ll save another 3%–everyone should have this card, it’s a no-brainer. It’s the cheapest diapers in the world delivered right to your door!


The cost of and preparation for college really deserves its own article. For now, though, I only will say this. The cost of college should not surprise anyone. It really blows my mind when parents speak of college as if it’s this all-of-a-sudden and huge burden. You know it’s coming for 18 years. It’s like driving toward a cliff that’s a hundred miles away, ignoring all the huge signs telling you to hit the brakes. I know Baby29 (and any subsequent children) will probably go to college. I know that college is quite expensive. I would like to be able to provide them the opportunity to study at a reasonably good in-state public school (~10k/year tuition, like the University of Virginia) and graduate with no debt. Now, there are many, many ways to make college totally affordable, so I’m banking on needing $60k per child for college (around the year 2033). In order to have that amount saved, I’ll need to invest $100/mo per child for the next 18 years. Considering $100 a month is what people routinely spend on cable, cell phone, home security systems, low-deductibles for car insurance, or one-fourth of a car payment, I don’t really see why the huge burden of college is given so much press–make time work for you! There are very few expenses in life that you can forecast 18 years ahead of time.


The idea that kids cost a quarter-million bucks seems like an insane one to me from this vantage point. I see all the stuff we have for baby and I envision the day all our kids are older than four and I’m logging into Craigslist to sell it all (and probably putting that money in their college fund). Things will change and other expenses will arise—I know I’ll be buying a lot more stuff for this little human. However, one year into it, I just don’t see a quarter-million anywhere in our universe. I’ll try to remember to post updates on baby/kid costs on an infrequent basis (once a year), to see ways we’ve saved. But, for now, enjoy smart fiscal parenting!





  1. I’ve always wondered what having a baby would do to my household expenses.

    In general I thought it would really blow the budget, but I hadn’t really considered how much a child consumes your life (not a bad thing). I suppose I wouldn’t waste my money on boredom as much!

    Haha, love the toys. Boxes are endless hours of good times!

    • Children do consume most of one’s life, that’s for sure. However, a huge benefit to that is that “life” is where we spend money. If we’re playing with kids, then we’re probably not spending money.

      It’s kind of like dieting. The most effective way is not by subtracting food, but by adding good foods. The bad foods will naturally fall away.

      In money, you don’t necessarily need to subtract bad money behaviors, but add good money behaviors and a lot of bad ones will fall away.


  2. This article is so encouraging – thanks for posting! Found your site via Rockstar Finance and I’m loving it. We’re pregnant with our first and have been horrified at all the advice people are giving us about all the stuff we NEED – so this is awesome!

    • Oh man the horror stories are total overkill. We completely overbought for our first, we literally have drawers full of unused bottles, an unused baby monitor, a swing she never used–the list goes on. Things you actually need: onesies, car seat, spoon, diapers, desitin, baby washcloths, and maybe a few others (sounds like I need to write a post).

  3. I think this makes sense. We definitely decreased our discretionary spending and diverted some of it to the baby. We might have still spent too much on #1, even with all the baby shower gifts. For baby #2 we bought very little since both are boys and that gave us almost 100% of the clothes needed.

    I think the $250k numbers are insane.

    • Good point. Our subsequent children have a lot of fixed costs already taken care of. Like baby monitors, crib, play yard, bottles, hi-chairs, swings, most clothes and even a few hundred extra diapers. We need more kids!

  4. Does the baby have her own room?
    Housing accounts for 30% of the $250k that the USDA figures for expenditures. They do count the value of the kids room. If people don’t have kids then they don’t need that extra room and would not have to pay for it, thus its a legitimate cost.

    • Hi Jim,
      That’s a good point and a reasonable thing to include in my calculations. The baby’s room is about 5% of our square footage. She’s never slept in it (she’s a co-sleeper), but I suppose she might use it one day. I suppose to be fair, we’d have to include 5% of our house payment to account for the kid.


      • Yeah, since USDA includes the housing costs you’d have to account for that as well to be more apples to apples. I”m not really sure how USDA figures the housing costs. What they’ve got seems a bit high to me. They might throw in a % of the utilities and all household costs in addition to just the rent/mortgage cost. Kids will increase use of electricity, water, etc as well.

  5. You’ve put a very nice spin on ways to cut back on raising a kid. While myself and the mrs have no intention of having a kid anytime soon, you sure make it seem more doable. On the toy note, i totally agree, my now 2yr old nephew has always been extremely amused with Tupperware containers and lids. He’d find the drawer with them, take them out and bring them to various family members and sometimes even put them back in 🙂

  6. I love reading about other couples who agree that kids aren’t as expensive as everyone says. We have 3 kids, and I would say we have spent well below the norm on. They are super happy, well taken care of kids. We’re a SAHM, one income family working towards FIRE and it’s awesome to see other families similar doing the same. Love the article!!

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