In today’s economy, family planning is the kind of exercise that can leave the weight of the world on your shoulders. You know you and your partner want to be parents, but the cost of becoming parents forces the decision to be out of the question.
It’s why it’s so crucial to make certain financial decisions when you’re thinking of expanding the family. You need your bank account to be ready for a whole new set of needs to hit it, and that’s almost impossible to do on the fly.
But what do you really need to think about right now? There’s a lot of paperwork and ‘what if’ scenarios to wade through, but the decisions below are the ones that’ll require the most legwork in advance.
How is Your Budget Likely to Change?
The budget you’re living with now cannot stay the same when you’re welcoming a new member of the family. You’re going to be paying for three people, and even when both you and your partner have renewable incomes, that still leaves the third person unaccounted for.
That means everything needs to be split three ways from this point onward. Even your savings amount needs to be considered from your child’s point of view too, as you’ll likely want to put a pot aside for them for their future as well.
But at this point, when you’re just discussing the potential financial cost, the one thing to work out is the estimated price you’ll be facing in this first year.
What will you need to invest in to bring a baby home? A carseat, a cot, baby clothes, baby toys, baby books, a stroller, plenty of feeding equipment and formula, as well as baby food and snacks for when they reach the six month mark.
That’s a lot of things to buy, even when just listed like this! So be realistic here. How much will the maximum cost of these items be? And how much are you going to need at the minimum?
Indeed, you can get a lot of baby stuff second-hand, but some items will need to be brand new to be safe to use.
Needing to Move
If you’re currently living in a property that has just the one room, you’ll need to move to a bigger place in the near future.
Of course, children don’t tend to need their own rooms for at least 6 months after they’re born, so you’ve got a bit of wiggle room here. That can take the pressure off of such a decision, especially in a volatile housing market.
However, it’s not something you’ll want to decide at short notice or on a whim. It’s best to prepare while you’ve got the time.
Looking at Health Insurance
Getting a family plan health insurance could be a good move for you and your partner now you’re looking to start a family. Not only will this take the weight off if either of you are out of work for an extended period, but it means your child will have full access to medical care too.
And seeing as babies and young children have quite a few healthcare needs in the first few years of life, this can be an invaluable policy to have on your side.
If you want to get health insurance privately, you’re well within your right to do so. Just be sure to properly account for the premium cost, and carefully review the policy terms.
You’ll want to see the breakdown of what you’re paying for properly outlined in the small print, as even minor appointments and small procedures may come with a heavy excess.
Saving for Your Child’s Future
Children change all the time. They grow physically, meaning plenty of new clothes and shoes, as well as mentally, meaning new educational equipment, and plenty of new entertainment.
As such, you’ll probably want to save some money to match these fast changing needs!
But then comes your child’s transition into adulthood. Recent studies found that about 75% of high schoolers want to go to college. That means there’s a good chance your own child will want to do so when they reach the same age, so you may want to save for this possibility too.
Will You Want More Children?
A lot of couples out there want to have more than one child. And while it’s true that second and third children are cheaper than the first child, it’s still a heavy expense you’ll be dealing with for at least the next 18 years.
And there’s also a chance that you could have a multiples birth. What you thought was just going to be your first child could end up being your first and second at the same time. That means double the costs and no chance to prepare for the second in advance.
A cost like this can also have later life effects. Indeed, if you end up having twins, they’re going to age at the same time, which means they’re going to hit milestones at the same rate.
It might not sound like a problem now, but it can soon snowball into a big financial gap. For example, if both want to head off to college when they’re 18, you’ll likely have to stump up two sets of tuition at once.
Dealing with the Cost of Expanding the Family
It’s a hefty one, and it’s one many families around the world often find hard to cope with. A key bit of financial planning can help to relieve this burden. At the very least, it’ll show you the kind of budget you’ll be working with going forward, and how that may change the way you live your life.
This is also your chance to get some protections in place, such as insurance, pension planning, and putting a proper safety net below you just in case. The earlier you can get started, the easier it’ll be to keep the pot properly filled up.