Financial Expert, Rachel Langlois, from Cyprus Credit Union shares how the cost of raising a child can be much higher than expected. She gives tips on how you can prepare financially when a child joins your family.
What can a couple do before the baby arrives to prepare financially?
- Revise Budget:
- You will need to incorporate both the one-time costs for supplies like a crib, stroller and car seat as well as monthly expenses such as diapers, food, doctor visits and clothing.
- Plan for cost of hospital bills. Make sure you have adequate insurance. Complications could become a huge financial burden if you are not prepared.
- Utilize a Health Savings Plan or Flexible Spending Account to take advantage of pre-tax benefits.
- Save to pay cash for hospital bills, oftentimes you can negotiate a cash discount.
- Baby Supplies:
- Don’t buy all at once, purchase as needed
- Stock up on supplies, when on sale look at price per unit
- Don’t buy new
Once the baby has arrived what are things a family needs to consider financially?
- Invest in life insurance. Not only for the breadwinner, but the second parent as well. If that parent covers the cost of childcare, you would want to be able to cover that.
- Keep saving. Start saving for college, but not at the expense of your retirement. Consider a 529 savings plan. Or start saving a small amount with each paycheck to help with costs such as a wedding, mission or school. $5/week will equal more than $4600 when they are 18 years old.
- Update wills to include your wishes for how to care for your children.
- Don’t try and keep up with the Jones’. Keep it simple. Your children do not need name brands or expensive toys.
For more information visit http://www.cypruscu.com