Spending Demands Keep Parents Planning

The cost of raising kids starts mounting before your children are even born.  Prenatal care, nest-building, and the cost of child birth are only a few of the expensive demands you’ll face getting ready to bring baby home – and then the real costs of parenting set in.

With so many household expenses to reconcile, it is important to anticipate and plan for the cost of new family members – before they arrive.  In practice, however, many new moms and dads find themselves wrestling with the cost of caring for kids.  Whether you are welcoming your first child or adding to a growing family, consider the following customary expenses as you budget for a new family member.   And when financial pressure taxes available resources, use creativity and spending discipline to keep costs low, without compromising your family’s quality standard of living.

Medical Bills

The cost of giving birth mirrors other medical expenses, continuing to rise alongside overall health and insurance spending.  Your total out of pocket obligation for having a child largely depends upon your insurance coverage, including your deductible level and whether or not certain delivery costs are excluded.  Ideally, with a short hospital stay and an uncomplicated birth, you’ll escape without oppressive childbirth debt, but insufficient coverage and unanticipated costs can leave you in a financial bind.

Recent findings illustrate wide differences in the cost of having a baby, based on geographic location, health insurance coverage and the hospital of choice.  The cost of an uncomplicated birth commonly rises into the tens-of-thousands and when a cesarean or another procedure is called-for, the cost rises even higher.  For the most cost-effective experience bringing a child into the world, research projected expenses ahead of time with an eye toward overall value.  Ultrasounds and other services may be limited by your coverage, so avoid costly missteps, by becoming familiar with the terms of your policy.

A Roof over Your Head

Singles without kids live a different lifestyle than those raising young children, so changing your family makeup has a dramatic impact on your residential requirements.  Adding to your family ups the ante, calling-for secure housing large enough to accommodate your clan.  Often times, this leads to costly upgrades, either buying a home or leasing a family-sized dwelling.  So while owning a home makes financial sense, timing a purchase for family reasons can strain your budget.  If a family is in your future, begin planning as early as possible, making time to save for a down payment and secure favorable financing.

Entertainment

Can you imagine the total cost of entertaining a child for nearly two decades?  Whether or not it was your intention, you’ve signed-up as cruise director, serving the leisure needs of your kids (spouse?).  And since discretionary, recreational spending is a problem area for many household money managers, finding economical entertainment alternatives is vital to your financial security.

Creative moms and dads take advantage of money-saving recreational opportunities, capable of distracting kids and bringing-together family members.  It is easier said than done, at times, particularly for large families representing diverse age groups and interests.  A few go-to resources parents use to keep kids entertained, without spending a lot of money:

• Library facilities
• Public parks and outdoor recreation
• Learning-inspired activities (cooking, yard care, handywork)
• Kids eat free promotions
• Family movie night at home
• Shared hobbies
• Musical interests
• Money-making endeavors

Education

Public school is a bargain when compared to the cost of private institutions.  So while quality of education is individual to each learning institution, parents must weigh the benefits and affordability of each learning opportunity.  Even moms and dads committed to public schools cannot sidestep the cost of education, as their kids fall-in to college and other post-secondary training.  While in-state tuition at a publically funded university presents one of the least costly paths to a degree or certification, tuition and related costs still grow beyond affordability for many families.  Graduates commonly find their way with the help of financial aid – grants, loans, and scholarships.  But the overall cost of educating a child prompts sticker-shock among well-meaning parents.

From the cost of childbirth through funding higher education, parents foot the bill for wide-ranging family expenses.  And while it pays to plan for the costs of raising children, successful parenting also requires financial flexibility.