Studies show that the average cost of raising a child today ranges between $183,000 to $282,000. Of course, you’re not writing that check all at once. Nevertheless, you still need to prepare for the costs of having a family. Some couples choose to wait to have children until they are fiscally prepared, while others simply hope for the best.
The Morning Ledger’s “5 Money Saving Tips for Couples Who Want Kids,” examines the importance of creating or updating your estate plan. Anyone over 18 should create a will as part of their estate plan. If you have a family with a baby on the way, this should be a top priority. If you’re not here to care for your baby, who will do it? Without a will, the court makes this decision.
Create a ‘Baby Budget’ Beforehand. Start living on your “baby budget” ahead of time, and calculate your change in income. You should begin living on a new budget before the baby arrives. If you do this, you can put the extra cash that is accumulated into savings.
Purchase Adequate Life Insurance. Getting life insurance is for the benefit of your family, and it provides you with peace of mind.
Save First. To be able to do the three items listed above effectively, always divide your money as soon as you get paid so you’ll have your monthly saving goals set before you run out of money. It’s also a good way to develop your budgeting and financial management skills.
Be Careful of Overspending. You want your kids to have the best of everything, but you can’t overspend and save at the same time. Create a realistic list of things you need to purchase and stick to it. Do your research and balance price and quality. Don’t skimp on safety items like a good car seat or high chair. Thrift stores or yard sales are great places to pick up gently used baby clothes.
Reference: Morning Ledger (November 10, 2016) “5 Money Saving Tips for Couples Who Want Kids”