It’s no secret that it costs a lot to raise a child these days, but it turns out a lot of folks are clueless as to just how much that adorable tot is going to set them back.
According to a new report by NerdWallet, the cost of the first year of parenting comes to about $21,248 for a household making $40,000, but that’s not what most people think. In fact, of expectant parents, which include those planning to have a child in the next three years, 54% believe year one will only set them back about $5,000 or less, with 36% thinking it will cost between $1,001 and $5,000 and 15% expecting it to cost $1,000 or less. Meanwhile 44% of all Americans believe the first year will cost less than $5K.
As for the biggest expenses, parents are also a bit clueless. Half of all hopeful parents, and 48% of Americans, think diapers will set them back the most, when they are actually one of the smallest expenses during year one. In reality, childcare is the biggest expense they’ll incur in the first year, although only 37% are aware that it will be their biggest cost.
And it’s pretty obvious that most parents weren't financially prepared to welcome their baby, with 29% of parents admitting they had no money saved before they had their child. As for how a lot of these expectant parents expect to get by, it seems a lot are counting on their circle of family and friends. The survey finds that 61% believe their friends and family will pitch in more than 20% of the baby’s first-year expenses.