Financial Preparation Is Needed for Having and Supporting Children

By Ryan Laspina
Senior Specialist, Red Flags and External Reviews

One of the most life-changing events for families is welcoming children into this world. While the emotional experience and rewards of raising children are priceless, the expenses are high and accumulate over a long period of time.

In addition, caring for a newborn while you work or go to school is challenging. Planning early and well, however, helps you manage both costs and time constraints.

Start Saving for Your Children’s College Fund Now

While parents have no financial obligation to help their children with college, many parents choose to fund their children’s education. In many careers, college degrees are necessary because they offer a competitive edge and higher earning potential in the job market. But you can mitigate the financial burden associated with college expenses by saving early.

Budget for Necessities and Anticipate an Increase In Expenses

Some sacrifices must be made when you find out you have a child on the way. Dinners out, expensive cable television packages and discretionary spending may be the first things to go. Although it may feel tough to do without little luxuries, paying for other expenses such as medical costs are more important when you find out you will be a parent.

Also, accept any gifts/hand-me-downs that family and friends offer. Some people are very proud and do not like accepting charity. But if a loved one is willing to help, let them. Baby needs can be expensive, so any gift items like clothes, bottles and diapers relieve some of the financial burden.

Plan to Balance Your Parental Responsibilities with Work and School

When you know children are in your immediate future, give some thought to how you will balance your various responsibilities. Will you be staying home on maternity/paternity leave for an extended period of time and will you be paid? Will you have time to go to class or do online assignments?

Also, do you have babysitter or daycare options included in your budget? All of these questions should be answered well before the baby arrives.

One of the biggest financial ventures anyone takes on is having and raising children. It can put stress on your financial situation and makes it tough to balance your parent and work/school responsibilities. But with good planning and preparation, you can put yourself in a better position to handle your children’s expenses as they grow.