The birth of a child is said to be a miracle, but it is a miracle that we can even afford children in this day and age. If it is your first child, you are in for a rude awakening. According to a recent study by the U.S. Department of Agriculture, the cost of raising a child born in 2015 until the age of seventeen is $233,000, or $13,000 a year, and that does not include the cost during pregnancy or the whopping costs of college. Before your little one is born, try and plan for what will likely to be a huge hit to the wallet.
Having a household budget is important no matter the size of the family. It may be a little easier to budget if you are solo or even married, but throw in children to the mix and you will begin to adjust on the fly. Babies bring extra expenses that come with medical bills, but as the child gets old you will need to factor in food and activities to monthly costs. It is no wonder that two-thirds of American’s fail at a successful budget.
Start Saving for Day Care
As soon as you find out you are having a baby, it would be a good time make sure not only that emergency fund is built up, but that you begin to save for day care. With most day care centers charging upwards of $60 per day to care for your child, for working parents that will add up to huge costs over the course of a month. Figure around twenty working days, you can plan on spending the cost of an extra mortgage payment a month. Maybe you have a relative or friend that is retirement age that wouldn’t mind being paid a discounted rate.
Try and Make Other Sacrifices
Like any successful budget to work, you will need to reduce unnecessary expenses so that at the end of the month, there is more money coming in than going out. Well throw in having a child, and you will need to continue to cut spending even further, most likely reducing some of your priorities. If concerts are your thing, maybe you go to a few shows a year instead of all of your favorites. Eating out is probably the biggest money saver, so if you really try and stay strict on going grocery shopping and only going out to eat once in a while, you will see the savings add up.
Life Insurance Premiums
If you are looking to leave your spouse and baby with a comfortable means to live on for a while due to your unfortunate passing, then setting up a life insurance policy right away is a must. Premiums will begin to go out the older you are, so if you are young, healthy, and free of tobacco, then you could probably get a good thirty-year policy for around $40 a month, which is not bad knowing that at least your family is taken care of if something were to happen.