The Financial Impact of Raising Children
Bringing a child into your life changes everything, including your finances. Paying hospital bills, the cost of adding another person to your household, and saving for college are all daunting prospects. With proper preparation, however, they don't have to be. Here are some things to think about even before you start decorating the nursery:
- Prepare for medical bills. Even before delivery, the doctor visits start to stack up. Get a good idea of your insurance coverage as soon as possible. Most providers should be able to give you a close estimate of how costs will add up. Though it's difficult to think about, you may also want to set aside extra money should any complications arise before, during, or after the birth. And don't forget: having a child means another set of regular doctor's appointments, which will be especially frequent during those first months and into childhood.
- Account for maternity and paternity leave. You just don't know how you'll feel once the new baby comes, not to mention how much time mom (and dad!) will need to take off of work to settle into the new swing of things. Dad might want to rack up some extra vacation days or savings, and maternity leave is often unpaid.
- Daily life is about to be completely different and more expensive. Adding a child to your life means you'll start needing goods and services you've never needed before. From diapers and childcare, to braces and ballet lessons, random costs will grow just about as quickly as your youngster will grow out of her new clothes. In a 2010 USDA report, it was found that in the first year of a baby's life, an average middle-income family spent an extra $12,000, a number that will only increase. By age two, parents were spending more than $12,500 per year on child-related expenses.
- Start saving for college right away. The cost of a good education has never been higher. Start planning for this important investment as soon as you can with an education savings account from Columbia Bank. The best way to take care of your child is to set them up for future success.