According to the recently released U.S. Department of Agriculture’s 2009 Expenditures on Children by Families report, the total for middle-income parents raising one child from birth to age 17 is $222,360, which doesn’t include college tuition. That’s 22 percent higher than the 1960 inflation-adjusted cost of $182,857.
Additionally, when it comes to providing a child with a college education, a recent survey commissioned by TransUnion found that too few take prepare for the financial implications of sending a child to college:
- One in five respondents said they either didn’t plan on saving or haven’t started saving for their children to attend college
- 17% said they would save less than $11,000 for their children’s college fund
- 39% said they weren’t sure how much to save for their children’s college fund
“Discussing finances with your significant other can be scary and awkward, but being open and honest about your individual financial situation can help you avoid issues or stress down the road,” said Heather Schneider, education director for zendough.com. “zendough.com provides personalized checklists with resources, tips and tools to help couples honestly, calmly and intelligently discuss and prepare for specific goals, such as starting a family or sending a child to college.”
Financial experts at zendough.com by TransUnion offer the following tips for those considering starting a family:
- Make a list of the essentials and the “nice to haves” for your baby and focus on the essentials. For instance:
- Evaluate your medical insurance policy to see what expenses will be covered during pregnancy and infancy.
- You probably don’t need that top-of-the-line, high-priced stroller or crib with all the bells and whistles. Consider purchasing a highly recommended, reputable and safe stroller or crib that still fits within your budget and you’ll have money left over for diapers and formula.
- While it may seem early, couples can open a tax-advantaged or other college fund for their newborn by setting aside a specific amount each month. This can help alleviate stress when it’s time to send kids off to school.
- Research the cost of childcare and discuss which options are right for your family.
- Do your best to be sure your financial house is in order before baby arrives. You can get started on this by working together to reduce debts and making sure both of you have credit that’s in good standing.
- Create a “baby budget” in advance of having the baby. Consider putting away money now for daycare, diapers, food and clothes. Remember, childcare services can cost a few hundred dollars per week or more and just one container of formula can run as much as $25-30 (and it goes fast). Be smart – plan ahead.
- Having a baby is an exciting time, but don’t let spending on gifts and clothes for your unborn child get out of control (leave that to grandma and grandpa!). Kids grow out of their newborn clothes and move on from one toy to the next very quickly.