March Financial Fitness Challenge—Make Room for Baby
Susan Tiffany, CCUFC
There's nothing like a baby on the way to reinforce the fact that even happy events can derail a budget. If you doubt it, consider that a middle income family (making between $45,800 and $77,100), with a child born in 2007, will pay $204,060 to care for that child to its 18th birthday, according to a report from the U.S. Department of Agriculture (USDA).
That figure does not factor in inflation, which brings the number to $269,040. And it does not include the cost of college.
The cost to raise a child is higher for a family with income of more than $77,100; then it rises to $298,680 or�allowing for inflation�$393,230. And unless you're firmly in the "one and done" camp, multiply these numbers by the number of children you have�or think you want to have�to get a sense of how much the tab will be by the time all of them turn 18.
In its spring 2008 release of The Cost to Raise a Child Today, the USDA reported that the cost to feed a child has gone down over the past several years, while child care and education costs have gone up significantly.
Focus priorities
Gearing up for a new baby can cost a small fortune�even if you're clear about your priorities. You need some equipment, but you do not need everything you'll find featured in parenting magazines, baby boutiques, and department stores.
Let friends and relatives indulge a bit, but otherwise try to stick to essentials. Accept shared and hand-me-down items gratefully�as long as the equipment meets safety standards. Manufacturing standards change over time, so older products may not meet today's rules. You can find out by visiting the Consumer Product Safety Commission Web site.
And remember to talk to someone at the credit union about your new family member. As soon as you have a Social Security number for the child, set up a savings account there and let family members know about it.
Even at an early date, you can discuss college savings goals with a credit union representative, for example, and have a better idea of what you can accomplish by letting an early start, and time, be your allies.
Then read Get a Head Start With Financial Baby Talk, this month's Turning Point feature. Author Jennifer Garrett, herself a mom, gets to the financial heart of bringing up baby.
Financial Fitness Challenge
Remember to register for the Financial Fitness Challengeregister for the Financial Fitness Challenge, paired with our Turning Points feature. Each month we'll randomly select five winners to receive $50 Visa gift cards; we'll choose each month's winners only from that month's entries, so enter often.
The people at your credit union can match all the members of your family with the best financial services for their lifetime needs. The earlier you start with your credit union, the longer you'll benefit from its great service and rates.
ST
Susan Tiffany, CCUFC
[email protected]
Published March 1, 2009
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