Having a baby can be a wonderfully exciting thing, but a new addition to your family can come with a whole world of added costs that you might not have initially expected. Jim Barker of Barker Insurance Services is a personal financial representative who spends his days helping clients manage their money and plan for their financial futures. He understands that the idea of preparing financially for a child can be difficult (or, for many, overwhelming), so he suggests that soon-to-be parents consider the following when budgeting for a baby:
Food, clothing, and medical care
The addition of a new child in your family means an extra mouth to feed, an extra body to clothe, and an extra person to medically care for. The monthly cost of supporting a baby can vary depending on a number of factors. For example, breastfeeding is generally thought to be less expensive than formula, and some health insurance plans are more generous than others. To get a good sense of what you’ll have to spend each month, talk to couples in your area who have been through the process. Chances are, they’ll be familiar with the local cost of items such as diapers, baby food, and other necessary supplies.
Furniture, strollers, and stuff
Although you’re bound to love cradling your new baby in your arms, from time to time, you’re going to need to put the child down – which means that you’re going to need a crib, stroller, high chair, changing table, and other baby-oriented furniture. You’re also going to need items such as clothing, blankets, and toys to keep your child warm and entertained on a day to day basis. Unfortunately, some of these necessities might come with a higher price tag than you’d think, so be prepared to spend a pretty penny on baby furniture, and leave yourself plenty of time to shop around for the best bargains.
Daycare, nannies, and nursery school
Whether it’s a nanny or a daycare worker, until your little one is old enough to go to school, somebody is going to have to watch that baby during the day (unless, of course, you’ve got a relative on hand to do it for free, in which case, thank your lucky stars). While the average cost of daycare can vary greatly from state to state, expect to spend anywhere from a few hundred to over a thousand dollars each month depending on where you live. Thinking of hiring a private nanny? That’ll cost you even more. You’ll also need to be prepared to put your child through nursery or preschool. Similar to daycare, preschool costs can vary from state to state. So to give yourself an idea as to what you’ll have to spend, figure out the average cost of daycare in your state and add a little for inflation to come up with your nursery school figures.
College
Believe it or not, some people start putting money into their children’s college funds while their little ones are still in diapers. Similar to a retirement account, the more time you have to contribute to your child’s college fund, the more that money will able to grow. With tuition costs rising rapidly throughout the country, these days, it’s more important than ever to start stocking away money for college as soon as reasonably possible after your child is born. Therefore, when you consider the monthly cost of raising a child, throw in a little extra for college fund contributions.
Of course, the notion of providing financial support for a child can be stressful, but with the right amount of planning, you’ll be able to come up with a baby budget that simplifies the process. It might seem scary, but remember: If all of those other people out there can have a baby without going broke, then so can you.
