They say good things come in small packages – and so do expensive things.
Take, for example, a newborn baby. Weighing in at seven or eight pounds, that adorable bundle will cost his or her parents nearly a quarter of a million dollars by high school graduation. That’s according to the U.S. Department of Agriculture, which recently estimated the cost of raising a child from birth to the age of 18 to be $234,900. And that’s before college tuition.
The birth of England’s newest prince (aka His Royal Highness Prince George Alexander Louis of Cambridge) earlier this month may have given rise to a rash of baby fever among commoners – but for those on a somewhat less than royal budget, nonprofit consumer credit agency Money Management International has a few financial tips to consider before diving headfirst into parenthood:
- Get a grip on debt. If you are carrying credit card balances from month to month, make a plan to pay them off before having a baby. Once the balances are gone, you can put those monthly payments toward a savings plan. If you are in over your head, contact a nonprofit credit counselor for help figuring out how to repay debts.
- Think about insurance coverage. Besides healthcare coverage for maternity care and well baby visits, long-term disability and life insurance may need to be part of your insurance package once you become a parent. Make sure you have the coverage you need.
- Consider childcare costs. For working parents, daycare is one of the biggest expenses that come with a new baby. Think over your options and check costs in your area.
- Make a “baby budget” and start living on it. If you’ll be relying on one paycheck instead of two, find out how that will feel by giving the new budget a test run. Your lifestyle will be different after the baby arrives, but getting used to your new budget will make the transition easier.
- Ask your friends for advice. There’s nothing like wisdom from those who have been there. Your friends can give you valuable insight into what life will be like with a new addition to your family. Ask them to share their budgeting strategies with you and learn from their experience.
These tips are from Money Management International (MMI), a nonprofit credit counseling agency that provides financial education and debt management services. Learn more about what they offer by calling 866-490-9477 or visit their website at moneymanagement.org.