Planning for a baby is a very arduous and expansive task; and while there are many issues to touch on, financial planning is probably the most important. It is vital to make sure you have the funds necessary to support your child before going about having one. However in most cases, if you waited to have a baby until you could afford it, you'd never have children at all. So here are a few things to consider when thinking about financing a baby.
The U.S. Department of Agriculture estimates it costs the average middle class family $184,000 to raise a baby from birth to age 17. Firstly, during pregnancy you will want some extra money for a variety of needs. There are classes, books, medical expenses, and clothes that are all going to break your wallet before the baby is even born. The child birthing process is a large expense as well. Then there will be all the expenses regarding actually raising the child until he/she is independent. Don’t forget that women will also have to take leave from work during a portion of this time as well, so planning ahead and saving properly is tremendously important.
The first thing you need to do is to make a minimum budget; this is just to get an idea for all the expenses you will certainly incur (note that this will be much less than all the expenses you will eventually incur come the end of the cycle). Talk to friends who are parents to get a better idea about all the expenses of having kids (diapers, formula. Etc). It is a good idea to add at least 10% to your budgeted number for emergences as well. Lastly, you always want to be thinking ahead toward college for your kids, so it is probably a good idea to start putting some money aside to earn interest while your children grow.
Sources:
http://life.familyeducation.com/budget/baby/57092.html
Yes - it takes a lot of money to raise a child. Beware of INCREASED EXPENSES AS BABY GROWS: Groceries, DIAPERS, Doctors, clothes, toys, babysitting, child care, etc. You need to be very clear on your expenses that you have now and project how they might change so you have a plan. You will know what you can spend. A few money saving tips: swap babysitting with a neighbor or a friend who also has children, join a mom’s club --- they sponsor lots of free and low-cost activities plus you meet a lot of people. Consider a used pump or other supplies on eBay.
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