The first year of raising a baby costs four times what you think it does

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You knew having a baby is expensive, but just how very expensive might surprise you. Roughly half of expectant moms and dads peg the cost of their little tyke's first year at $5,000 or less, according to a new survey from NerdWallet. Too bad they are wrong.

Indeed, while five grand may seem like a hefty tab for disposable diapers and smashed peas, it's an unfortunately naive estimate. According to NerdWallet's analysis, even families of relatively modest means can expect to pay at least four times that in year one of childrearing. 

To arrive at their findings, NerdWallet crunched the numbers for two hypothetical households: one making $40,000 a year and one making $200,000 a year. What they found was that a baby's first year of life actually costs more than $21,000 on the low end, and about $52,000 if you throw in a few "extras" like life insurance and a college fund. 

In other words, a family making $40,000 per year could surrender more than half their income to their baby. (NerdWallet used that hypothetical income instead of a lower figure that might qualify families for generous subsidies.)

Of all costs, childcare and housing were by far the biggest expenses for the $40,000-per-year households, costing roughly $8,000 and $4,700 respectively. That's no surprise, as other analyses show the cost of childcare for families with working moms has risen by at least 70% since the 1980s.

Food, healthcare, transportation and "miscellaneous" — including toys and diapers — gobbled up the rest of the cash.

There was a silver lining in the analysis: A lot of people get help from their families. 61% of those surveyed said they expect friends and families to kick in for at least 20% of expenses.

Thinking about adding to your family? Congratulations! Now get started on that emergency fund.

Indeed, before you break out the naming book, it's more pressing to run your costs first on a baby calculator to figure out a ballpark of your financial needs.

Remember that having a baby gives you an exemption to get a new health insurance policy — outside of open-enrollment — meaning it's a good time to comparison shop deductibles and out-of-pocket costs. 

Finally, while most baby costs are pretty fixed, remember a lot of expenses in the "miscellaneous" category — think strollers and clothing — can be purchased used to save a little money. Junior might even thank you for those hand-me-downs one day, if it means more cash for college.

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