By Hughes Federal Credit Union
The arrival of a new family member is a momentous event that comes with both new responsibilities and additional expenses. While it’s important to celebrate the great news, it’s also wise to familiarize yourself with the additional costs so that you can better prepare yourself and start building a financially secure future for you and your growing family.
The cost of a new child
Housing – A newborn won’t take up much space, but a baby won’t stay a baby forever. Remember to consider all of the expenses that come with a new home like a mortgage, utilities, maintenance, and home insurance.
Food – Food prices have gone up and high-quality foods (meats, fresh fruits, and vegetables) see an even bigger increase in cost. If your child has any food allergies, you’ll want to include any special food requirements in your budget as well.
Childcare – The average family can expect to pay around $216 a week, which makes up 17.1% of the national median household income.
College – Parents who will pay for their child’s education can expect to pay anywhere from $18,500 to $54,880 for undergraduate full-time tuition according to a report from College Board.
What to do before the baby arrives
Health insurance – If you’re employed and covered by employer health insurance, you’ll want to make sure you add your new child to your health insurance plan. Talk to your human resources department and/or health insurance provider to learn more about what’s covered for childbirth and other family coverage costs.
Parental Leave – The United States does not provide universal child care nor does it provide paid paternal leave but if you’re employed, your employer may offer paternity leave or some other type of paid assistance to help you with your new child. Talk to your human resources department to learn more about your options.
Create a registry
A baby shower is a one-time expense but it can help you collect some essential items friends and family are happy to provide. Think about going secondhand on some items that don’t necessarily have to be new.
Open a separate savings account
Open a separate account for the additional monthly baby expenses and consider setting up automatic transfers to help keep you on track.
Build a new budget
Review your old budget and build a new one taking into consideration all of your new future expenses. Factor in big decisions like a parent staying home and take a look at your income and expenses to determine where some items can be adjusted and if extra income is needed.
Secure a stable future
Having a plan in the case of a parent’s death will ensure your family is taken care of if the worst happens. If you haven’t already, consider purchasing life insurance to help cover any costs and to help make up for any lost income.
Confidence starts with knowledge. Get more money-saving tips and visit HughesFCU.org/MoneyCoach today.
