Starting a Family

Oh baby, it’s time to consider your finances before your newborn arrives.

We know you have all the love a kid could ever need. But how about the money?

No one can teach you everything you need to know to be a good parent. It takes compassion, common sense and your own nurturing instincts to get a child through life’s ups and downs. But there is a lot of sound advice out there about the financial aspects of child-rearing.

Start while your tyke-to-be is still a gleam in your eyes. Safety is a big concern. If you have an older car, do you trust it in bad weather? Will it protect your baby in an accident? Or maybe it’s sort of sporty and not a great fit for car seats. In either case, it might be time to buy something safer and family-friendly. Now take a look at your house. Do you have space for a nursery? Do you have other child-proofing needs? You might need some sort of loan for renovations.

Think of the car and house as capital costs. How about operating expenses? You need to factor in the cost of diapers, bottles, food, clothes and cute little stuffed animals. Give your monthly budget a pre-natal exam. Will it handle the added burden? If not, what steps can you take? Maybe there’s a way to share baby supplies with friends or family. Or consider a warehouse club to buy your baby items in bulk at a cheaper price.

There’s also a price to pay to keep your child healthy. Does your (or your spouse’s) current employer-provided health plan cover kids? If not, spring for an upgrade. Then there’s child care which carries an average price tag of roughly $750 a month. Invest some time researching the options. Is a commercial day-care center your best choice? Maybe there is value in going with a neighbor who is licensed to watch a few kids in her home. Another option is to see if your friends with kids want to pool resources for a nanny.

The list goes on. Check with your accountant or financial advisor, if you have one, about any changes in tax burden or tax-paying strategies. Make sure you update your life insurance policies so your child will have a secure future even if something happens to you.

Finally, take time to review your long-term savings goals. After all, college is only 18 years away.

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