How to Budget for Having Children
Original post by Sam Ellyn of Demand Media
A child is a blessing that comes with a hefty price tag. In addition to prenatal care, delivery costs and outfitting a home for a newborn, you’ll be faced with ongoing expense for childcare for many years to come. Creating a budget that includes all of your parenting expenses will help you avoid surprises and maintain a stable financial position.
Even before your child arrives, you’ll have expenses as you visit doctors and require special medications or supplements. Talk with your physician about the possible expenses a mother will have during her pregnancy. Ultrasounds and other tests, as well as prescriptions and over-the-counter medicines and supplements, may not be completely covered under your health insurance policy. Talk with your insurance provider to determine what prenatal costs you’ll have to pay.
Determine which hospital you’ll use for your delivery and discuss the costs associated with a stay with the hospital. The hospital may try to upsell you on additional services or room types not covered by your insurance, some of which you may want to pay for yourself. Consider that the mother may go into labor when you are on vacation or otherwise not able to get to your hospital of choice, and budget for a Plan B delivery.
You’ll need to outfit a nursery, buy clothes, a car seat, stroller, feeding bottles and other items so that when your baby comes into your home you are ready to care for it. Meet with other mothers to learn what you’ll need and start pricing items. You may find that your friends will donate much of what you need now that their children are grown. If you plan on a baby shower, you can register at various online retail sites for items you need and track them as people indicate they are purchasing them for you. Buying used items from resale shops or using online sites such as Craigslist will help you keep your costs down.
As your children grow, they’ll have many of the same expenses adults have, such as food, clothing, sporting equipment and healthcare. Create an annual budget that includes these items, as well as school needs, toys and sports league fees. If both parents will be working and you will be using a nanny or placing your children in daycare, add that cost to your budget.
If you plan on sending your child to a private school, you might want to start saving for tuition as soon as he is born. This will take the burden off having to pay school expenses using only your annual salary. If you plan on starting a college fund, set aside a monthly contribution when children are young. Look into programs that cover your child’s tuition at a particular institution or group of state schools if you sign up years in advance. Financial expert Dave Ramsey recommends starting a college fund after you have budgeted for debt elimination, an emergency fund and retirement.
Not all children will need braces, show potential as a sports or music prodigy or have other special needs, but many do. Build an emergency fund into your budget to address any problems or opportunities your child may have as she grows up. If you do not need to dip into this fund during your child’s pre-teen years, you can use this money to finish funding a college plan early.
- DaveRamsey.com: Budget Implications of Having a Baby
- The New York Times: Budgeting for a Child
- MoneySmart: Budgeting for you and your Child
About the Author
Sam Ellyn has been writing since 1983 for national and regional sports, fitness, business and parenting magazines. He writes and lectures on fitness, nutrition, sports, business, cooking, beauty and home and garden, and works in magazine consulting and association management. He worked in commercial kitchens for more than 20 years, and holds two journalism degrees.
- BananaStock/BananaStock/Getty Images