According to the U.S. Department of Agriculture, children born in 2013 are projected to cost parents $245,340 to raise until age 18. This figure takes into account food, childcare, housing and education – but not college or pregnancy expenses.
Preparing for a baby involves many details, like getting a nursery ready and learning about caring for a newborn. One of the biggest stresses facing soon-to-be parents is the financial burden.
However, financially planning for these added expenses correctly can help.
Going To The Doctor
According to Smart About Money, the average pregnancy will require about a dozen doctor’s appointments.
Every health care plan is different. While some will charge one fee for the appointments and the delivery, others will charge per doctor visit. Find out how your plan works, and how you’ll be billed.
Once the baby comes, the doctors appointments aren’t over.
In fact, NerdWallet explained a newborn’s first visit to the pediatrician should be within the first week. Before the baby comes, find a good pediatrician and make an appointment. It’s important to be sure the doctor is within your network to avoid additional charges. The pediatrician’s clinic should be a good source for this, but it’s always safe to double check with your insurance company.
Taking Time Off
According to the U.S. Department of Labor, only 12% of private sector employees have access to paid family leave through their job. This means you’ll likely have to save up some money to carry you through the days you need to take off before and after the baby comes.
It’s important that you determine what policies your company has in place for situations like yours, as well as what state laws are. Find out to determine how much time you’ll have off and whether you’ll be paid during it.
It’s always important to have an emergency fund for unexpected life events, like losing a job or a medical emergency. Most experts recommend setting aside about three to six month’s worth of funds to start.
If you don’t have an emergency fund, it’s time to start one. If you already have one, it might be a good idea to add to it. You never know when you’ll need some extra money. If you don’t have paid maternity or paternity leave, this money could come in handy.
Straighten Out Your Priorities
When you begin budgeting for your child, you’ll also have to look to the future.
Is the home or apartment you currently live in the one you want to raise your child, and any potential future children, in? If you want to upgrade your living situation one day, you’ll need to start saving up.
If a large home isn’t a priority, determine what is.
For instance, many children will one day want to explore higher education, but college isn’t cheap. Consider starting a savings account or certificate of deposit to help finance your child’s future educational dreams and contribute to it regularly.
Your retirement account is another element that shouldn’t go neglected right now. While you may think post-career savings are primarily for you and your partner, think again. If you can’t financially support yourself in your older years, your child will likely step up and help out.
When a new baby comes, it’s also important to think about the many insurance products out there. You may need to add your child to your health insurance. If you have a life insurance plan, you’ll want to name him or her as a beneficiary. Or, if you don’t have life insurance yet, it’s a good idea to consider it.
The cost of raising a child takes many parents by surprise. However, by getting ready early, you’ll be better prepared for your family’s future.