The average cost of raising a baby during the first year is $10,000 to $15,000, which totals more than $245,000 to age 18. Once the initial sticker shock wears off, many parents single-mindedly focus on paring costs -- by shopping at secondhand stores, accepting hand-me-downs, choosing store-brand diapers, and most of all, by enlisting help. While friends may be willing, oftentimes it is the grandparents who can be counted on for emotional support, practical support, and, when possible, financial support. Here are several specific and fairly simple ways that grandparents can help save new parents at least $3,700 during the baby's first year.
Childcare (estimated savings: $3,000 or more)
The most money-saving assistance grandparents can offer is to provide childcare while parents are at work. According to the National Association of Child Care Resource and Referral Agencies, the average cost of a full-time slot in a childcare center ranges from $3,582 to $18,773 a year ($300 to $1,564 monthly). In a big city, the monthly figure for an infant could be as high as $2,000. The average cost of home daycare is less, at about $7,761 a year ($646 a month) for babies and toddlers. Hiring an in-home nanny, the priciest option, could cost new parents anywhere from $500 to $700 a week, or $2,000 to $3,000 every month.
Even if grandparents assume childcare duties just once or twice a week, a young family's outlay falls significantly. By way of example, my mother-in-law cares for our preschool-age daughter one day a week. My husband and I calculated that reducing the number of days our daughter attends daycare saves us nearly $3,000 a year.
Parents may feel the need to compensate grandparents on a smaller, more affordable scale because they are saving the family so much money. Kyla Dembowski and her husband, Gregg, of Columbus, Ohio, wanted to reward her newly retired mother for taking care of their daughter several days a week. They mutually agreed on a payment valued at about one-third the daily cost of sending the child to daycare.
Babysitting (estimated savings: $600 or more)
Not all grandparents are retired or good candidates for regular caretaking on weekdays, but there are other opportunities to step in. As new parents quickly learn, the occasional date night can get pricey. Babysitters make an average of $10 an hour, which means about $50 added to the tab for dinner and a movie. For a couple that goes out once a month, babysitting costs would total at least $600 a year. Calling on the grandparents can save this large sum of money -- not to mention parents' sanity. Viewed in a certain way, this is a priceless gift that's shared among grandparents, parents, and children.
Gifts (estimated savings: $100 or more)
While it's tempting, especially for first-time grandparents, to buy the adorable clothes, snuggly teddy bears, and itty-bitty baby shoes, those things won't get parents very far in the middle of the night or when the diaper stash runs low. Grandparents can lessen the costs for new parents by purchasing what the baby needs rather than what's cute.
The items that top the list for both necessity and cost are a crib, stroller travel system, and diapers. These items might seem humdrum, but they are essential for raising a baby and run up quite a tab for new parents. At minimum, a crib and stroller cost between $100 and $200 each. The average child will use more than 2,700 disposable diapers in the first year, which adds up to more than $550 (based on an average price of 20 cents a diaper). The bottom line for just these three items could tally nearly $1,000 in the first year. If grandparents could pitch in for even one, the cost of a new baby would seem less overwhelming.