A new baby’s arrival may be both exciting and expensive. How much can you expect to spend on your child in the first year? What financial tools should you consider using? This post will show you how to budget for your family’s newest member. In case you find yourself worried, you can always rely on Payday Depot until your next payday. So let’s get our finances in order!
In the case of a first child, getting things such as cribs and strollers means starting from scratch. Birth in America comes with a one-time medical expenditure. Unsurprisingly, this is the most challenging expense to quantify.
Remember that the cost of regular maternity care varies substantially by geography and insurance coverage. Find out how much you’ll have to pay for prenatal, hospital, diagnostic, and postpartum care. It’s difficult to predict your costs without knowing your insurance coverage.
Your insurance policy and location are important factors in determining delivery costs.
Baby one-time purchases vary as much as medical costs, but for different reasons. This category can grow rapidly based on parental desires. As in:
- Travel requirements like a stroller, an infant car seat (required by law), a baby carrier, and a diaper bag, among a plethora of other needs.
- Home needs to be baby-proofed and other purchases that will make your baby’s nursery.
- Nursing, feeding, and maternity clothes are also unseen expenses that can cost as much as you would like to spend.
When your kid is born, the regular care costs begin. Include the following expenses in your budget:
- Child care will be your single largest budget item if both you and your partner want to work once your baby is born.
- Food, such as Gerber formula, clothing, and diapers, accounts for the most recurring expenses.
- Diapers vary in price, but experts recommend setting aside $75 per month for diapers.
- After feeding your baby solids, expect to spend roughly $50 per month on meals. Compared to adolescent food costs, young child food costs are quite cheap.
- The Doctor expenses –Visit the doctor for three to four wellness appointments for evaluations and vaccinations, plus additional visits for illness. Your rates should be in your health insurance policy.
Consider These Financial Tools
You should start saving for your child’s future as soon as possible. Check the following list to set priorities and start budgeting:
- Tools for college savings: Start saving now with a 529 plan, Coverdell Education Savings Account, UGMA/UTMA account, or one of numerous other college education investing vehicles.
- Life Insurance and Health insurance: It is best to start as early as possible, so speak with your policy provider.
- FSAs (Flexible Spending Accounts): FSAs allow you to pay for key family budget items like child care and healthcare with pre-tax cash. Set up a dependent-care FSA and a healthcare FSA with your employer or financial advisor.
Children are a wonderful blessing, albeit sometimes costly. Remember that averages don’t mean much when the variation is as wide as infant costs. Health insurance can cover most hospital expenses, but the rest require careful planning and budgeting.