Raising a baby now costs over $20K in the first year—more than a third of the average U.S. salary

If you feel like your wallet is hemorrhaging cash just trying to keep a baby fed, clothed, and alive, it’s not just in your head. A new BabyCenter study finds that raising a baby now costs $20,384 in the first year alone—and that’s before factoring in the cost of childbirth itself.

For the average U.S. household, that’s more than a third of their income. And for 15% of moms, baby-related expenses eat up over half of what they bring in. The result: stress, financial strain, and difficult decisions about the future of their families.

Let’s be clear: It’s not that parents are bad at budgeting—it’s that America is bad at supporting parents.

The price tag of parenthood is crushing families

Between formula shortages, inflation, and skyrocketing childcare costs, parents are getting squeezed at every turn. And it’s forcing families to make impossible choices:

• 89% of moms say finances impact their mental health
• 26% of parents have delayed having more children because of costs
• 25% of parents have decided to have fewer children altogether

This financial burden doesn’t just affect parents—it’s shaping the future of entire generations. Birth rates in the U.S. continue to decline, and when having a baby feels like taking on a second mortgage, it’s not hard to see why.

The system is rigged against parents

Raising kids in America is expensive—not because parents are “doing it wrong,” but because we’ve built a system that makes it almost impossible to do it right.

• No national paid leave: The U.S. remains the only wealthy nation that doesn’t guarantee paid parental leave, forcing many parents back to work when their baby is just weeks old.
• Unaffordable childcare: The average cost of full-time childcare is now $17,000 per year, and in many cities, that number is even higher. Meanwhile, waitlists stretch for months (or even years), leaving parents with no good options.
• Soaring cost of living: From diapers to daycare, the essentials are more expensive than ever due to inflation and a system that treats parenting as an individual burden rather than a collective responsibility.

Related: SAHMs deserve childcare, but many are too afraid to ask

Parents need more than budgeting hacks—they need real solutions

Right now, when parents express financial stress, the response is often: “Here’s how to save on baby gear.” But while tips like buying second-hand or signing up for childcare tax credits can help, they don’t fix the systemic issue that raising kids in America is just too damn expensive.

It’s time for a cultural awakening—one that acknowledges parenting as the fundamental, economy-driving, society-sustaining work that it is. That means:

• Policy changes: National paid leave, universal childcare, and financial relief for parents.
• Workplace reforms: More flexibility, parental benefits, and support for working parents.
•  A cultural shift: No more treating parenthood like an individual “choice” when it’s a collective responsibility that impacts the entire economy.

Related: 1 in 4 parents say they’ve been fired for childcare challenges

Bottom line: You’re not failing—America is failing parents

No family should feel like they’re “doing everything wrong” when they’re raising kids in a system that sets them up to struggle. The reality is, you’re not failing—it’s simply that expensive.

Until policymakers and leaders step up, parents will continue doing what they’ve always done: figuring it out, stretching every dollar, and making the impossible work. But it shouldn’t have to be this hard. And the sooner we recognize that, the better future we can create for all families.

Sources:

1. Skyrocketing baby-related expenses. BabyCenter. 2025. “Baby-related expenses now cost parents $20,384 in the first year alone”
2. Wage index. Social Security Administration. 2025. “National Average Wage Index”