What Children Cost

What Children Cost

Would you buy a boat if you couldn’t afford it?  Of course not!  That would be financially irresponsible.  Though it may seem odd to compare children to boats, what most people don’t think about is, boats cost far less than raising a child!  If you find you can’t afford a boat, you can always sell it.  Clearly not an option with a child!  We’re not suggesting you get a boat instead of a child.  What we are suggesting, is taking a good look at your financial situation, and what effect the addition of a child to your family will have on it.  Acknowledging and planning for the costs of a family can prevent unnecessary stress in the years to come.

Loss of Income

Before becoming pregnant, it is a good idea to inform yourself about your company’s maternity leave policy, whether it is a paid leave or not, and whether or not short-term disability insurance will be available to you.  Also, are you planning on returning to work after the birth of your baby, or are you intending to be a stay-at-home mother?  All of these things can have an effect upon your family’s total income, and should be taken into account.  Financial “surprises” are rarely of the “fun” variety.

How Well Are You Insured?

In today’s world, many of us, to keep our premiums down, have chosen minimal health insurance options.  After all, if you’re healthy and rarely need a doctor, why pay more?  Well, pregnancy is a time when it is good to be well insured.  It can be difficult to switch your coverage once you are pregnant, as many companies have clauses about not covering “pre-existing conditions”, so you’ll want to take care of this ahead of time. 

Medical Coverage Checklist

What does your insurance cover?

·        Prenatal care

·        Tests

·        Hospital stays

·        Delivery (what kinds?)

·        Anesthesia

·        Emergency procedures

·        Newborn doctor’s visits

·        What are your deductibles?

If you don’t have access to health insurance, check if there are any government funded children’s health insurance programs in your area.  These can provide affordable coverage for pregnancy and up through the first phase of childhood.

What If?

Nobody plans on becoming too ill to work, or even dying and leaving a spouse alone to support the children, but these things can happen.  Long-term disability and life insurance are good investments to take care of this worry.  Some employers offer long-term disability, so check and see if you are already covered.  Life insurance can be bought in many forms: Term Life Insurance, which is the cheapest form, guarantees to pay out a certain amount, when you pay a certain premium.  For other options, it is best to seek out the advice of a financial planner or insurance specialist, who can help you decide what policies are best for your needs.

Planning for the Future

To effectively plan for the future, you have to know what your situation is now. 

·        Work out your present expenses versus your present income. 

·        Factor in the cost of raising your child, and any possible reduction in income.  Be realistic and know that the cost of raising a child in our society can be greater than the cost of buying a home!

·        Start an education fund for your child.

·        Don’t neglect your own retirement fund!

Working out the financial side of raising a family before you become pregnant is one of the many ways in which you can avoid stressful financial surprises in you future, and ensure a happy, healthy home life without undue financial worry.