Growing Pains: Covering the Costs of Children and Childbirth

Are you financially ready to have a baby? It’s a complicated question, and the answer differs for every individual. If you’re considering expanding your family, it’s helpful (and yes, also a little daunting) to understand how much a child costs throughout their adolescence.

In 2015, the U.S. Department of Agriculture (USDA) estimated that the average cost to raise a child in the United States from birth through age 17 is more than $230,000—or more than $280,000 if you factor in an average of 2.2% yearly inflation.

And while the USDA notes that raising a child costs 27% less in rural areas than in the urban Northeast, that still adds up to nearly $10,000 per year—without factoring in saving for college.

Childbirth Costs

Based on a NerdWallet survey, most Americans significantly underestimate the cost of having a child. In fact, the survey found that even parents who saved money to cover costs of their child’s first year didn’t save enough. First-year costs begin with the birth, which costs an average of $4,300—without complications and even if you have health insurance. That number is higher in some states than others, with costs more than doubling for those without insurance.

The costs of growing your family can significantly skyrocket if you’re using in vitro fertilization (IVF), or if you’re planning for adoption or surrogacy. As with the other costs of raising a child, the costs of IVF, adoption, and surrogacy can range significantly depending on your needs, your location, and other variables.

Costs of IVF

FertilityIQ notes that the average patient undergoes two or more cycles of IVF treatments and only a handful of states push employers to cover the costs of treatment within insurance plans. And while the average cost of IVF treatments is often cited around $12,000, IVF may range from $40,000 to $60,000 when factoring in multiple treatments, fertility medications, ultrasound monitoring, and other related expenses. As CCRM Fertility’s cost breakdown shows, costs also vary whether using fresh or frozen eggs.

Surrogacy Costs

Verywell Family points out that surrogacy is one of the most expensive options, ranging from $50,000 to $100,000. West Coast Surrogacy, providing services to those in California, notes that the state has a higher demand for surrogates, creating prices as high as $130,000. The agency’s site provides a helpful breakdown of some of the costs associated with surrogacy beyond the base pay for your surrogate, such as screening costs for the surrogate and intended parents, as well as legal fees. According to Physician’s Surrogacy, the compensation received by surrogates usually covers health-related expenses as well as a fee unrelated to medical expenses.

There are surrogacy loans, grants, and surrogacy financial assistance that can aid families that choose to go this route. You can also see surrogacy laws by state with this helpful resource from Family Inceptions. 

Adoption Costs

There are many routes you can take when adopting a child, including agency adoption (an agency helps you through the entire process), independent adoption (you hire an attorney or agency to help you with the legal aspects), international adoption (adopting a child from outside the U.S.), and foster care adoption (giving a child currently in foster care a permanent home).

American Adoptions breaks down some of the typical costs for each of these types of adoptions, with foster care adoptions averaging less than $3,000 and agency adoptions, such as those through American Adoptions, ranging from $40,000 to $50,000.

Whether you’re considering one of these ways to grow your family or your family has already expanded, there are ways to cover the additional costs (or to reduce any debt you’ve taken on).

Using Your Home Equity

When it comes to learning how to budget for a baby, one of the most significant costs is housing, which accounts for 29% of the total expense of having a child. But as a homeowner, that cost is also an opportunity. You have an additional option for accessing the funds you need now to raise your child: home equity.

The best way to tap into your home equity will depend on your financial situation and goals, with factors like credit score and loan-to-value ratio playing a part in the qualification process. If you have debt, you may not want to take on an additional monthly payment or interest.

But there are ways to access your home equity without the burden of additional debt.

Home equity investments, like Hometap, allow you to access a portion of your home equity without monthly payments or interest. Since it’s an investment, you get cash now in exchange for a share of the future value of your home. For many families, this option lines up with their larger plans for eventually selling their home and moving to one that better fits their growing families’ needs. This allows the homeowners to settle the investment using a portion of the proceeds from the home’s sale.

No matter how you choose to grow your family, getting your finances in order will allow you to focus on your new family member with more joy and less stress.

Tap into your equity with no monthly payments. See if you prequalify for a Hometap investment in less than 30 seconds.