Every prospective parent has heard it a million times — babies are expensive. But just how expensive can a little bundle of joy be? The cost of raising a baby requires one to consider a lot of factors, almost all of them will be quite expensive.
Some of these expenses can be reduced or even eliminated if you follow an effective financial plan. Knowing the expected costs of raising a child will help one financially plan as one begins to broach the subject of parenting with a partner.
Delivery CostsMuch of the discussion surrounding newborn babies relates to the cost of caring for the child after he or she is born. We'll get into that soon enough. But the rising price of welcoming a newborn into the world is something that must be considered, especially in the modern age of high-deductible medical plans. According to Parents Magazine the average charge to new parents for their hospital visit is around $3,500.
Clothing & DiapersThere's a good chance that a high percentage of your baby's early-life clothing needs will be met by well-wishing friends and family. Still, clothing is an expense that quickly adds up for new parents. The biggest expense is diapers, which can cost around $20 a week. Babies also tend to need an extra layer of clothing than adults, so those layers can add up to be quite pricey, particularly during the cold winter months.
ChildcareBy far the biggest expense for any new parent is childcare, and it's also the expense that causes the most anxiety. The good news is that while childcare is never cheap, it doesn't have to cost a fortune. Although the well-known daycare centers can run well into four figures on a monthly basis, looking into smaller daycare outlets — such as those that people run out of their own homes — can provide a significant cost savings. And if you happen to work at a school or daycare center, you may be able to bring your child to work for little to no charge.
Preparing for the FutureThe period following your child's birth is an ideal time to start a college fund. Even something as small as $20 per week can add up to a good amount of money over time.
As a young parent it is also essential that you also have a comprehensive Life Insurance policy that protects your loved ones' financial future. You should make sure that you have enough coverage so that your child will be able to pursue life as you would like them to even if you are not there to provide for them. Having children comes with the responsibility of financially providing for them, and that responsibility doesn't necessarily end with your passing.
If you are in the market for Life Insurance, you came to the right place! At Sproutt we make it easy and transparent to find the policy that best fits your needs, lifestyle and budget.