Thursday, January 19, 2012
Budgeting for a baby
Are you ready - financially - to have a baby?
You've started talking about your favorite names - and the ones to avoid. You've got the colors picked out for the would-be nursery. You've been daydreaming about family trips to the park.
It's decided: You and your partner-to-be in parenting are ready to have a baby.
But do you have a financial plan in place to account for the growing family?
Tami Rechtenbach, director of member services at Dupaco Community Credit Union, says she's seen many parents-to-be leave the financial planning side of family planning as an afterthought.
"It's really expensive. Make sure you have a financial plan to go along with the hopes and dreams of having a family," she advises. "Are you going to stay at home or work? What kind of income do you have versus the cost of daycare? What are your goals as far as saving for college and providing for your child's education?"
To help plan for overall expenses in childrearing, the U.S. Department of Agriculture offers a free online Cost of Raising a Child Calculator. It estimates how much it will annually cost to raise a family, taking into account everything from higher grocery bills to added life insurance premiums.
Rechtenbach suggests meeting with a financial planner at your credit union to find out how to financially support the family structure you hope to achieve.
"I see a lot of people at my desk who are financially struggling. One person was here last week, and he said, 'Now that I have a child, I really want to fix this,'" Rechtenbach says. "I think if you can put a little thought into it ahead of time, it will make it easier in the long run."
By Emily Kittle