Becoming a parent is a major endeavor and whether you are able to begin your financial planning well in advance or need to start planning just as parenthood approaches, keep in mind that there are some things money can’t buy and that you can get the help of a Fee-Only financial planner at any point in your child’s life.
The U.S. Department of Agriculture releases a report each year that estimates the costs of raising a child in the United States between birth and late teen years but doesn’t include expenses related to pregnancy and college. This year’s figure is $241,000.
With the excitement of having a new baby on the way, there will be a temptation to outfit your new addition with the latest and greatest. Yahoo! says, “While it is an incredibly exciting time, be sure you don’t go overboard on outfits and top-of-the-line toys and furniture. Look for deals and see if your friends or family have any hand me downs.”
When it comes to money and spending, here are things to think about:
Savings: Once you become a parent, you have many foreseeable years of increased expenses. For the immediate present, you will need to increase your savings overall, both for emergencies and for child-rearing expenses.
Housing: Controlling housing costs can make a big difference to your budget. The USDA estimate seems daunting but what some people don’t know is that when they make these calculations, the USDA considers extra bedrooms as an added expense. While renters pay more for each bedroom, homeowners reap the tax benefits of home ownership as long as they are in a home they can afford.
Estate Planning: If you have yet to draw up a will, you will need to do so. If you already have a will, you need to revisit it and possibly update it. Consider setting up a trust for your child and find guardians you can trust to care for your children in the event that you cannot.