Raising a child is a full-time and costly journey. It would be best if you planned because parenting is expensive. Though you may not capture every expense as ideally as possible, you’ll need help managing your finances when you don’t plan early. Here is a list of common expenses you need to think about as a parent-to-be.
1. Costs of Childcare
Childcare services are a must if you plan to resume work after the birth of your baby. You can either hire a nanny or look for daycare services. The costs of the care service vary depending on your location and the type of care you require. Daycare can cost you approximately the same amount you will pay for college tuition annually.
A full-time nanny costs more than a daycare. If one parent can stay at home or have relatives and friends help with the child, this will help you save up more money. Hence, make sure you plan and look into childcare, as it involves someone helping you raise your child. Just make sure you plan adequately.
2. Health Care Coverage
For a newborn baby, health care is a must. Babies are fragile and prone to infections. They also need regular vaccines and general monitoring, so your doctor’s visit will become a norm. If you’re paying for cheap health insurance coverage, consider upgrading it to one with well-baby consultation costs. A higher premium plan can help you save money as it often offers lower deductibles and copay. This makes it cheaper than having to pay for other expenses from pocket.
3. Educational Expenses
College tuition in the United States is one of the highest expenses a parent can be expected to incur. Hence, the need to start saving for your child’s education as early as possible, even when your baby is in the womb. Yes, retirement savings come first, but you should also save money for your child’s college fund. On average, public college tuition costs $20,000, while private colleges may cost $55,000 annually. You’ll also incur other expenses such as student housing, book funds, and extracurricular activities.
4. Food and Clothing
Children grow fast; the older they get, the more food they consume. If your child has specific dietary needs, this may cost you significantly in buying and storing the food. As part of the parenting journey, factor your child’s growth and the attendant expenses into your budget.
5. Vehicle Costs
According to TheWeek.com, you spend approximately $356 on car repairs annually. If you plan on being a parent, factor in expenses to cater to your child’s safety while driving, such as buying a car seat. Make a post-baby budget that’ll look at ways to save on your current budget expenses while creating a category to help accommodate your expanding family. The parenting journey is good, but raising a child is expensive.
6. Savings and Investments
With parenting, you need a trusted financial institution to save for your child’s college savings and other long-term investments. Today, there are numerous institutions where you can invest in your child. Get online and research financial products suitable for your needs. Data Reports puts the number of people online at approximately 2.2 billion. So, you’re in plenteous company here.
Information on investment plans such as trusts is now more accessible online. Consider reviewing your estate plans so the right beneficiary receives the inheritance in case of death. Identify a trusted individual who can be the custodian of your child’s assets in case of death and the child is a minor.
7. Legal fees
You may also need to look into legal fees in case of a custody battle. According to Maryland Courts, in custody proceedings, court rulings decide how parenting time will be divided, how much control each parent has over their child’s life, and where your kid will reside in Maryland.
Parenting creates numerous responsibilities for you. As a parent, create a solid financial foundation for your home to help relieve future stress. Early planning helps with peace of mind when you know your family is financially protected.