Just over a year ago the jewel of my eye was born. We have had some ups and downs, but I wouldn’t change anything.
Watching our daughter grow has been an incredible experience.
Due to having to work, I missed her first time crawling. I did manage to see her first steps though, so very lucky to be in the right place at the right time. Seeing the joy in her eyes of what she had achieved was a great moment.
Isn’t it incredible how children can keep falling, yet they never give up? Adults tend to lose that skill in my experience. Children have no fear of failure which is scary, but great to see them come out the other side.
With a goal of financial independence I hope not to be so tied to do a job in coming years, so that I can get to enjoy many more of these firsts. I can’t think of anything worse than being stuck in a cubicle while she is going through all these changes.
The first year costs of childcare
You will often hear a child only costs as much you want. That is one of those bullshit statements that sounds cool, but is not reality.
Sure, there are some things that you can do to save money such as buying second hand gear, but it still costs a lot.
Here is our breakdown:
Pram (2nd hand) $300
Cot (2nd hand) $60
Bassinet (2nd hand) $50
Baby monitor $150
Maternity clothing $320
High chair (2nd hand) $30
Baby clothes $420
Mum’s hyperemesis $1,500
Commentary: Mum had a very rough pregnancy that involved throwing up for the full term. This caused $1,500 worth of damage to her teeth.
Total pre – birth costs $2,900
Year one costs
Wet wipes $60
Breast pump/bottle $50
Baby clothes $660
Mum clothes $150
New car $13,000
Car seat $350
Hospital parking $55
Birth certificate $90
Opportunity cost $30,600
Commentary: Our old car was too small for our new needs. $13,000 cost to upgrade.
All else is fairly self explanatory. We had to buy a lot of formula in the first year due to breast feeding issues.
We ended up having to buy 3 birth certificates. Silly dad bought the first two using mum’s incorrect birth date! So, I had to buy third correct one.
The big cost is the opportunity cost of my wife not working. It is important to consider the opportunity cost as that is income you would have had otherwise. In saying that, we think the benefit of having a full time mum is well worth the cost for us.
We have also been extremely lucky with the support we have of friends and family. Not just emotionally, but also financially. We have received gifts of food, toys, books, baby bouncers, car capsules, breast pumps, babysitting, and toys all in this first year. We are so appreciative for all this support. It means a lot.
Total year one costs $47,870.
The first year, including pre birth, has set us back almost $51,000. Apart from the opportunity cost of not working, the new car was the only other significant expense. We won’t experience that cost every year so I anticipate year two being a lot cheaper that the first year or so.
If you don’t want to include the opportunity cost of not working, then first year costs were $20,170. $13,000 of which were for a new car, and $7,170 for other.
I am detailing this post for you as I don’t want anyone to go in to parenting thinking that it is only as cheap as you want it to be. There are many unavoidable costs.
You can however make it cheaper by buying second hand and having a supportive network of family and friends.
Of all the costs I would say just the car and Kiwisaver could have been avoided if we really wanted. Making the unavoidable costs $5,870. Much cheaper than $20,170 we spent, but we would have missed out on the benefits of a larger car and investing for our daughter. The cost of the car will be spread out over many years too, but for accounting purposes I have only included the purchase cost in year one.
One benefit of having a child to our budget has been that we are spending less now on travel and entertainment. So that helps bring down the $51,000 number somewhat.
All in all has been an amazing year that sure, will slow down our journey to financial independence, but is worth every cent. For what is financial independence without meaning?
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