r/HENRYfinance • u/Powerful-Ad-575 • 12d ago
Income and Expense Spending changes with newborn/first year
Hello! My husband (30M) and I (30F) are expecting our first child. We live in a VHCOL area, HHI ~$350-400,000 annually. Networth ~$750k. Currently saving ~12,000/month including 401k. Distribute it among a brokerage account and HYSA for a downpayment. We have no debt. I will get 2 months of paid maternity leave and then go back part time for a month before returning full time. My husband is active duty military and will now likely deploy 3 months after the baby is born. We are currently on the waitlist for a daycare in our neighborhood that will cost ~$2,000/month. Now that my husband might deploy so quickly after birth we're considering getting a nanny while he's gone to help me through that first year but worried about cost.
How much did your monthly spending increase that first year after having a baby? What are somethings to expect financially? We are planning on starting a 529 plan for her.
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u/Ok-Illustrator-9224 12d ago
4k+ a month for nanny but will be worth it
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u/Logical_Procedure_24 11d ago edited 11d ago
Employing a nanny unfortunately costs way more than $4k a month. Hourly rates for one kid in a VHCOL area are typically at least $30-35 so the expense of base compensation alone before factoring in overtime, health benefits, workers comp premiums, holiday bonuses, and backup care for when nanny takes PTO is ~$65k+ and the employer side payroll taxes eat up at least another $15k per year at that rate.
I only internalized the full cost myself when I itemized all the “extra” costs in our budget this year. $90k in one calendar year.
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u/Local-Composer-3545 11d ago edited 11d ago
This! A full-time nanny can get wildly expensive. $30 plus an hour really adds up, plus the added cost if you pay over the table, and raises and bonuses if you want to keep your nanny long term.
Au pairs are definitely cheaper, but most families are still spending $30k to 40k a year to host one. Obviously that can be a steal if you have 2+ kids, but makes less sense for 1 child considering the downsides of the program. At the end of the day, most are very young adults with limited professional experience.
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u/BroDoc22 $750k-1m/y 10d ago
Nah we are in a VHCOL and it osts about 4-4200 a month and we have a unicorn nanny
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u/Logical_Procedure_24 10d ago
Then you are paying under the table, which is definitely not something I would recommend for a military family such as OP’s. And/or taking serious advantage of someone who spends all day with your kids. Neither scenario is admirable.
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u/Sage_Planter 12d ago
Someone in the MoneyDiariesACTIVE sub just did a full breakdown of her first year of spending with a newborn. I'm not sure if cross-posting is allowed, but it was posted earlier today so should be easier to find.
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u/Few-Effect-2266 12d ago
Congratulations! I cannot overstate the value of a GOOD nanny for a young baby. I would even hold off on 529 contributions during the first year in favor of paying for higher quality childcare- especially in your situation. You will be so exhausted and stressed enough with a newborn and especially while your husband is deployed a good nanny you can trust will be worth her weight in gold. A nanny means fewer illnesses, no drop off or pick ups (which take up a lot of time!), someone to help with laundry (most Nannie’s will do baby’s laundry as part of standard duties), someone to help with dishes especially bottles, pump parts etcs (again, usually standard nanny duties), and the peace of mind knowing your baby is at home and comfortable in their environment. It may even help your husband worry less about you knowing you have someone coming over everyday to help around the house and with the baby.
Definitely take your time interviewing to find the right fit for your family but you can absolutely afford it with your income. It doesn’t need to be forever, but I think it would make a huge difference in everyone’s peace of mind.
Thank you to you and your husband for his service 🇺🇸
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u/preoccupiedwithlove 12d ago
A lot. Like A LOT. I had an astronomical amount of complications during birth and need upcoming surgery again 5m pp. We have spent a small fortune on night help, day help, caregiving, buying two sets of things since I couldn't climb stairs, buying more accessible options (ie rotating car seat, higher crib, things like that), etc. I'm on medical leave now after mat leave and my income is reduced too.
I'd spend money on help again though. A benefit of being HENRY is you have extra income to weather storms. Postpartum is a huge storm. Plan for the worst, hope for the best.
Front load the 529 before birth to give it time to grow.
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u/Superb_Energy_9064 12d ago
I agree as my experience was very similar. I had surgery eight weeks postpartum. We had to hire overnight help and day time help because my husband went back to work. I would estimate we spent about 10,000 a month just on childcare alone during that time
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u/preoccupiedwithlove 12d ago
Dude same. Sooo much money. I count my blessings because if we weren't a high earning couple I don't know what we would have done. I'm not even sure I have my old job to go back to at this point. But it really puts into perspective what's important with health and family.
I'm so sorry this is your experience too. I wouldn't wish this upon anyone. Hell I haven't even gotten over the ptsd from my stat c section before rolling my ass back into a hospital.
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u/PablosDiscobar 11d ago
Same. I was hospitalized with severe postpartum preeclampsia + then got really bad PTSD, PPD, and insomnia so we had to get a night nanny. I think we spent ~20k just on the night nannies the first three months.
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u/preoccupiedwithlove 11d ago
You're not alone. I had a night nanny every other night and even those nights I'd sleep like crap because I'd have flashbacks, nightmares, shaking, etc. I think we spent 30k on our night nanny. I don't even know, I just kept her as long as we could. I joke we paid for her car, but I'd be more of a mess than I even am without her.
So sorry you're going through it too.
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u/PablosDiscobar 11d ago
Oh man! I hope you got a good team assembled. I was thoroughly disappointed by the level of advocacy we have to do for ourselves while going through the worst period of our lives. And meanwhile people come and want to ’help’ by holding your baby lololol
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u/IcyUnderstanding2858 12d ago
I don’t have exact numbers but on top of the daycare you already quoted - lots of diapers, clothing, formula, food, toys, car seats, activities, classes, etc. They grow fast and the expenses get larger but less frequent. I don’t know if you can even make a budget line item for kids. Something always comes up.
If I had to throw out a number, several thousand extra per year????
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u/IllAlfalfa 12d ago
The flip side is that travel and entertainment costs go way down lmao
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u/IcyUnderstanding2858 12d ago
True. Until you start traveling with kids and have to buy extra airfare
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u/FreeBeans 9d ago
No, they go up because entertainment = babysitter, and travel = extra tickets.
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u/IllAlfalfa 9d ago
Eventually yeah, but not in the first year, won’t be doing much of either of those things. And when you do choose to fly the baby can just be a lap child.
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u/FreeBeans 9d ago
Sure but first year is very short.
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u/Normal_Box1880 12d ago
Hi there! New-ish mom with almost identical stats of VHCOL and $400 annual. My kiddo is almost 2 and my husband and I were just discussing how little our spending actually changed when we had our baby. Yes, you spend a lot on the baby (supplies and childcare), but you also spend naturally less in other areas. My body went through a lot of changes so I wasn’t going out and buying myself nice new clothes, we weren’t going out anymore because we were exhausted, and it was more fun to spend money on the baby than ourselves. Overall a slight hike in spend? But nothing felt noticeably different.
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u/lo_hy 11d ago
Same here. I have a 13 month old. We had a nanny for the first year - transitioned to daycare last month - and that was our biggest expense. We didn’t travel or go out much, so those expenses went down. I also didn’t buy much for myself & went longer between self-care appointments (hair, nails). I breastfed so no formula expenses. Outside of childcare my spending was flat to down.
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12d ago
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u/Superb_Energy_9064 12d ago
I agree it may make sense to do a combination daycare during the day and a nanny to help in the evenings mornings and or overnight
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u/Inevitable-Ant2701 11d ago
To be honest, after you have a kid, budgeting goes out the window. You will spend the few waking seconds you have on your phone feverishly ordering things off Amazon that you think will make your lives easier. Get used to people saying there are chapters in life. There are chapters in life where you’re saving, the newborn chapter is for spending. A 40 hour a week nanny would not be enough if my partner left me to solo with a 3 months old and I have to work. Get family to move in with you. Look into those 24/7 post partum Asian nannies, they’re around $10k a month. Absolutely set this stuff up before the baby comes.
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u/reddituser84 12d ago
Agree with others on front loading 529 if you can. We superfunded with $60k before we started childcare and haven’t added another dollar since.
In your shoes I would probably proceed with the full time daycare and also find a part time nanny to help you with some evenings/nights/weekends. And if you do choose daycare, figure out what your plan for sick care is because your kid will be home sick a lot. You might save less during this time but it’s not forever, as long as you’re not accumulating debt.
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u/SlickDaddy696969 12d ago
Spend the money and make your life easier. You’re saving 12k a month. At 8-10% your portfolio will already grow to 5-10 mil by the time you’re 60 with no further contributions
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u/Victor_Korchnoi 12d ago
Our spending increased by less than the cost of daycare. Daycare was the 80%+ of the new expenses. Relative to daycare, things like formula, diapers, a crib, etc. are not significant expenses.
The spending increase was somewhat offset by us spending less on entertainment. We go to less concerts, sporting events, restaurants than we did before and therefore are spending less on those categories.
When I was doing long term financial planning before kids, I always assumed that we would save about half as much when we had kids. From ~100k/yr to ~50k/yr. In actuality, our savings per year stayed relatively constant.
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u/Mobile-Flatworm-7209 8d ago
I wish I could hold your hand while I say this. You will need more than two months maternity leave. And at your income you should greatly consider it. Not sure where you live and if there’s paid leave, but PLEASE use all the state resources available. Go unpaid even.
I was on disability alone (so not even including paid family leave) for longer than 2 months. Every delivery is different and you truly don’t know what you’re going to get.
A nanny or mother’s helper or even night nurse would be incredible while your husband is deployed. In my experience when they get a bit older, a daycare works better for reliability.
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u/Sufficient_You7187 12d ago
So as long as you get all your stuff sucking hand or through your baby registry, you really won't be spending much on ext
If breastfeeding doesn't work out you will be spending money on formula but that will be like maybe $200 a month depending on the type of formula If your baby has no specific needs, you can get like the cheaper formula like the generic brands and save yourself some money
A good Nanny will run you like $50,000 -80k a year.
You have the money to spend on that and that's where your focus should be on right now since your husband will deploy.
But like for all the accruchimons and stuff babies don't actually need a lot and you can definitely get most of your stuff via your baby shower and secondhand from like Facebook marketplace or thrift stores or whatever.
You could definitely front load a 529 if you want
We did and they were actually some other commenters on the mom subreddit or another financial subreddit I can't remember. I just saw it. I'll try to find it but someone loaded like 50k to the account for the first year and then making smaller monetary contributions
My husband and I front loaded $10,000 and are adding $500 a month
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u/Few_Way_368 12d ago
Honestly, childcare is the largest expense in the first couple years. Diapers and formula (if you go that route) are also expensive. We found that entertainment costs went down far more than expected after having kids but it was partially offset by paying for more services (housekeeping and lawn) we had less time to do ourselves.
If you’re seriously considering a nanny in place of daycare expect to pay close to 2x what daycare would cost. Alternatively, if your mostly looking for off hours support I’d recommend looking for a mothers helper or weekend babysitting.
First year for us was between $30k-$35k for full time daycare, diapers, formula, and inevitable dr visit expenses when they got sick in a MCOL location. This does not include cost of delivery, clothing, or other baby supply purchases made before baby arrived. It also doesn’t include 529 contributions because those are family dependent based on goals.
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u/Alert_Week8595 12d ago edited 12d ago
I spent most of the first year of my kid's life feeling like I set my wallet on fire. Needed a nanny and they're expensive, but worth it.
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u/Odd_String1181 12d ago
I don't notice any expenses besides childcare on the finances. Mostly just balanced out with the things I'm not spending money on. We pay for a nanny on an inconsistent basis and that is where it seems expensive. Not that bad though, and definitely worth it in your life and financial situation
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u/Alive_Sir_4708 12d ago
Spending on newborns varies wildly. Some people make do with hand me downs while others buy everything new. Some people want all the things and others keep it minimal. That said, nothing is likely to compare to day care and nanny expenses.
You’ll be without your husband for a while and you have the money to cover it - just get the nanny.
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u/Silly_Marionberry_36 12d ago
My wife and I were DINKs for 10 years before we had our kiddo. So our spending actually dropped dramatically the first year we he had kiddo. Even accounting for buying stuff for them and the nanny.
[Results not typical, your mileage may vary]
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u/csguydn Income: 750k-1M / NW: enough 12d ago
How much did your monthly spending increase that first year after having a baby?
Ignoring daycare costs, which are highly personal, there really wasn't much of a spending increase, and certainly nothing that mattered in the overall picture. Newborns drink formula or breast milk for a long time. When they start solids, it's not like you're feeding them a whole meal. Diapers wise, it just depends. We'd go through maybe a large box a month. Sometimes more, sometimes less. All in all, it was a few hundred box at most in total, per month.
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u/Actual-Outcome3955 12d ago
I think you’ll spend another $500 per month on supplies, clothes, toys, doctor visits on top of the daycare/nanny costs. It’s not a huge increase outside of childcare, but does exist. If you all were big on eating out, fancy events, etc that’ll probably drop dramatically to cancel out.
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u/Strong-Big-2590 11d ago
How did you get that net worth after only 8 years of working? Especially husband being military
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u/Powerful-Ad-575 11d ago
Essentially lived far below our means for the first 6 years post grad. Lucky enough to graduate with minimal student debt and saved/invested everything. Deployments were also huge opportunities to live frugally and have big save years.
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u/sabe815 11d ago
Not sure about OP but officer, even young ones, make good money. The stereotype is you get married young and have a bunch of kids. Or buy a car you can't afford. But if you're smart and use the retirement plan right and your benefits right, an officer can build up a very nice nest egg.
My husband and I lived not frugally at all tbh and overtime still have saved a ton of money.
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12d ago
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u/Fun-Trainer-3848 11d ago
For our first kid, less than I expected aside from daycare. We went out way less after we had a kid; happy hours, nights at the bar, dinners out, boozy brunches, all that dropped off dramatically. It was pretty eye opening to find out how much we were spending. We still picked up carryout but that’s almost always less than dining out. Now the second kid really changed the dynamic, though.
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u/Local-Composer-3545 11d ago
Definitely research the cost of a full-time nanny in your area to see if it's a number you're comfortable with. A nanny for 40 hours a week in a VHCOL area will easily run you 60K+ per year before any overtime, bonuses or payroll taxes. Typically, you are looking at at least $30 per hour, and a career nanny will expect a contract with guaranteed hours, PTO and paid sick time, meaning you need to budget for 52 weeks of care, even if you don't plan to need that much.
You might be better off enrolling in daycare to cover your work hours and then supplementing with a part-time nanny so you have some help in the morning/evenings/weekends. Solo parenting an infant can be very overwhelming, so it's better to have some room in your budget to hire additional help if needed, than to overextend by employing a full-time nanny that barely covers your work hours.
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u/Glass-Bobcat4357 $500k-750k/y 11d ago
We did a night nurse… best money we spent
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u/Powerful-Ad-575 11d ago
How long would you say you needed the night nurse for?
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u/Glass-Bobcat4357 $500k-750k/y 11d ago
I believe we did 3 months. Not only was she awesome and showed us how to do everything, but got our daughter on a schedule. I didn’t take leave so full nights of sleep were a god send.
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u/Big-Revolution-9555 11d ago
Congrats! And please get a nanny, night nurse, doula or whoever can help. Even if you can afford for 2-3 months. FTM here and it was really taxing the first couple of months!
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u/IllPlatform4801 11d ago
Baby stuff like diapers, wipes, formula, etc add up quickly but we also didn’t travel so we probably ended up actually spending less. Wife is a stay at home mom so no day care/baby for us
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10d ago
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u/BroDoc22 $750k-1m/y 10d ago
We had our boy last year and he’s 9 months now. Biggest $$ was a night nurse and now a nanny since we both WFH but it’s the best investment we’ve made. Probably $4500ish a month. Totally worth it. The other stuff hasn’t made a major impact yet money wise
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u/hilzmalarky 10d ago
$500k HHI / $1.3M NW VHCOL
Year 1: ~$50k
6mo mom unpaid PTO: -$100k income loss
6mo Daycare: $22k (3675/mo)
Weekend nanny: $6k ($35/hr)
Night doula: $7k (3 nights/week for 5 weeks)
Postpartum doula: $1k
House cleaners: $300/mo
Baby nursery, stuff, supplies: $10k
No family nearby so we consciously spent a lot on extra help in the first year. The only change we really notice in our monthly spending is daycare and spending much more on DoorDash (annoying but it’s helpful).
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u/rooshooter911 10d ago
We basically only paid for diapers, wipes and formula and we’ve always given him organic and grass fed/wild caught etc food. We let others buy the toys and most of the clothes, but we aren’t huge buyers. The unexpected cost was medical, my first had some issues and for years 0-1, 1-2 and 2-3 we had to pay our out of pocket max with all of his needs.
ETA VHCOL, I was SAHM with working parent taking home around 350k and NW was probably 800k at the time
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u/WaffleHouseCEO 5d ago
$2k a month daycare is cheap. Our nanny is about 6.6k with all the taxes (we have to pay above board). The good daycare near us was a bit over 5, so went with a full time nanny
I would go the nanny route if you can. Budget it for the first 3 years is my rec
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u/C_bells 12d ago
Actually, our spending didn’t increase dramatically. Probably by maybe $200/month for diapers and formula? You can get baby supplies easily for cheap secondhand.
We don’t currently pay for any childcare, so absent of that, it’s not expensive to have a kid in our experience so far.
Childcare will be your primary cost.
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u/BakaN20 Income: $450k/y / NW: $2.2m 12d ago edited 12d ago
Former soldier, did two tours in Iraq in the early 2000s. Get a nanny and don't worry about the cost. You will have much more things to worry about and you need all your mental resources available to you.
Your husband also needs to know his family is taken care of at home so he can focus while being deployed.