"On average, it is said that roughly $8,000 is spent on a baby in its first year of life," says Christine K. Walker, author of The Smart Mom's Guide to Staying at Home: 65 Simple Ways to Thrive, Not Deprive, on One Income (Trafford Publishing, 2004) and a mother of three children. And that's once your new son or daughter is born. Hospital costs – for the birth and immediate postpartum and baby care – may further whittle away at your wallet.

A 2004 survey by Aetna and the Financial Planning Association found that expectant mothers spend more time decorating their baby's room than evaluating the details of their health plans. "[M]ore than 20 percent say they are most focused on shopping for baby accessories and furniture, and nearly one quarter say they are most focused on reading baby-related books and magazines," according to the survey analysis.

Yet experts caution that not all births are routine, nor, unfortunately, are all babies born healthy; some require immediate medical intervention or even a neonatal intensive care unit (NICU) stay. Children younger than 1 year make up only 1 percent of the U.S. population, but they account for approximately 13 percent of all hospital stays, according to a fact book put out by the U.S. government's Agency for Healthcare Research and Quality (AHRQ). The AHRQ also finds the vast majority of these stays are newborn infants, and that neonates account for seven times more hospital stays than any other pediatric age group (children through age 17).

Jennifer Shu, instructor of pediatrics at Dartmouth Medical School and co-author of Heading Home With Your Newborn: From Birth to Reality (American Academy of Pediatrics, 2005), had a problem-free pregnancy. Her delivery, however, was not so. She needed an episiotomy, vacuum, forceps and emergency C-section. Then, once her son was finally born, he developed jaundice and was sent home with bilirubin lights to goad his immature liver into normal function. "I had everything for one baby," says Shu.

She also had terrific insurance. "When I had my son, I paid nothing at all," says Shu. But not everyone is as fortunate as Shu.

Kelly Johnson, a preschool teacher in Beaverton, Ore., also had good coverage but she still had to pay. She doled out a $150 co-pay for routine visits to her obstetrician during pregnancy and the vaginal delivery of her son. And for her and her new son's 48-hour hospital stay, Johnson owed an additional $350.

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