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Financial Planning When You're Expecting

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Relationships are one of the most important aspects to raising a happy, healthy baby. In fact, time has shown us that the love, affection, and proper behavior we teach our children is better than neglect and money. A child needs nurturing more than they need every item on the planet money can buy. Despite the need for more nurturing than cash, it is still in your best interest to focus on finances as you consider having a child.

According to an article in the Huffington Post from 2014, the middle income family will spend approximately $245,300 on their child from the time the child is born till they reach 18 years of age. This is for a child born in 2013 and is 1.8 percent higher than the projection from 2012, as it accounts for inflation. Most middle income families spend about $12,000 to $14,000 on their children per year.


The amount spent on a child in a year is a car, fully paid, and the amount spent on a child for 18 years is a decent home in some cities and towns. If you put these numbers in perspective, and realize that the number will increase as the inflation rate increases, then you could spend over $300,000 just raising your child for 18 years if your child is born in the next few years and more than that if you wait five to ten years.

Financial planning to raise a child needs to start before you are emotionally ready to have the child, to ensure that you are financially prepared when your first born child arrives.

Here is a breakdown of what you will require during pregnancy:

• Health insurance

• Income spent on making a will and power of attorney

• Income spent on a life insurance policy

• Medical expenses based on what your health insurance will or will not pay for maternity fees

• Income spent on creating a nursery and getting the essentials for taking care of your newborn

• Extra savings in the event of a difficult, high risk pregnancy or birth complications

• Income for buying new clothing and other essentials as your baby grows

During the first year, you will need multiple outfits per day, the income to pay for washing these clothes, as well as income to buy new outfits as your child grows. A newborn can already be born out of the newborn clothing sizes.

In a month, your child may be wearing outfits for a 3 month or 6-month old. The point is you may need to buy new clothes, sell the old ones, and ensure that you have the finances to handle the quick growth rate of your baby.

As your child reaches a year, you will want to have different stimulating toys and activities for your child. Each year, your baby will need new clothing, new care items, and new toys to help them develop their brains and gain an education, and proper behavior.

Once school starts, expenses will increase as you buy school supplies, new outfits for school, and much more relating to school needs.

If your finances are wiped out before you have a maternity bill, it will make things difficult. You may not be able to provide even the basic items your newborn needs for their arrival and the years after.

Here is a list of things you may want to consider as you do a little financial planning:

  • Housing
  • Food
  • Transportation
  • Healthcare
  • Childcare/education
  • Clothing
  • Miscellaneous
  • Emergency

These topics are usually expenses related to your new baby, but you can also take it a step further and list all your expenses and income. As you do with any budget, you will want to have a list of what you make, what your projected expenses will be, and what you already have in savings.

Smart parents are those who begin to add to their emergency fund the minute they find out they are pregnant. These same financially intelligent individuals shop around, determine what they need to spend for the safety and comfort of their children, and create a budget of what will be spent.

Remember, you can always sell the clothing that no longer fits or the items your child no longer needs, as long as safety permits. However, you will not be able to recoup all the losses and you may wish to keep some things for a second child.

You can also realize that spending $2 on a onesie outfit is better than spending $10 or more. Your child is going to grow out of their clothing quickly. There is no need to spend more than you can afford or should spend to be reasonable.

You are going to want to take time off from work to spend with your baby, to bond, and you don’t want to have stress due to financial worries. There are also things you will want to do with your child as they age.

For example, when your children are tall enough to ride all the rides at Disney World or Land, you will want to take them there. You may have local zoos, museums, and local, national sites that are important, which you will want to take your child to. It is all about being able to afford all of this that will make you want to start setting up a fund for your child now, before they are even a tiny strawberry size in your belly.

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