For many new parents, one of the first questions you may ask after seeing that positive pregnancy test is, “How can we afford this?” Children are expensive and your financial investment often extends a lifetime. So, how can you best prepare for costs associated with raising children and start family financial planning?
Baby showers and… Daddy diaper parties?
If you’re expecting your first child and someone offers to throw you a baby shower – let them! They genuinely want to celebrate, and it can help alleviate some of the initial financial burden of starting a family. Register for the top expensive necessities (stroller, car seat, possibly even furniture) as well as some lower cost items such as bottles, sheets, blankets, diapers and wipes. While not glamorous and cute, the cost of these items adds up. And if planning ahead, add items that your little one will need a year or two down the road. Items like toddler booster seats, training potties and sippy cups will be here before you know it. Not sure which ones to register for? Ask other moms what they use and read all the reviews. When in doubt, test drive them out at the store first.
If this isn’t your first child, you may want to go with a smaller, less formal, celebration. New to the scene – daddy diaper parties! This is a laid-back celebration with friends and family, who bring diapers and wipes to help the family with the abundance of dirty diapers coming their way!
Saving for childhood expenses
The newborn stage is just the beginning of child expenses. Starting a savings account for your child can help plan for everyone’s financial future. Making monthly deposits can accumulate over time and provide a buffer to help pay for expenses that arise during childhood. Field trips, buying
the first car, sports equipment, musical instruments – whatever arises! When your child reaches adulthood, you can turn over the account and let them begin managing their own expenses. Talk to your bank or financial advisor about a savings account that is right for you.
Saving for college
College may seem like a long way off but saving now can alleviate financial stress later. Florida Prepaid offers options for prepaying college tuition as well as an option for a 529 savings plan that allows you to save money tax-free for educational expenses. College plans are usually transferable and you can get your money back if your child does not go to college. They are an excellent platform to save money for future expenses. Talk to your financial advisor about the best plan for your family.
While considering the costs of raising a family can seem overwhelming at times, take it one step at a time. The most important piece of parenting is loving and caring for your child. Your relationship will mean more than the fanciest stroller or most lavish vacation.
Giggle tip
When people ask what to get them for their birthday, especially when they are little and don’t realize gifts are a “thing,” have them contribute to a college fund or account. Every dollar helps!
Quick financial facts
- Average medical costs for labor and delivery are $4,500 (Health Affairs)
- Average monthly cost of diapers is $75 (Investopedia)
- Annual childcare costs range from approximately $10,000 for in-center childcare up to approximately $28,350 for a nanny or in-home childcare (Investopedia)
- Annual average tuition at a 4-year university in Florida (UCF, FSU, UF, USF) is between $5,656 – $6,410 (UnivStats)
- Annual average book costs at the same universities are between $890 – $1,200 (UnivStats)