What to Consider When Planning for a Family

Pregnant woman and man leaning on car

Starting a family is a decision that requires some careful considerations, including thinking about any career issues that might arise and assessing your emotional readiness. During the planning process, getting your finances in order is a good first step.

Having a child can be costly. According to a U.S. Department of Agriculture report, parents spend nearly $14,000 a year on child-rearing expenses. A survey by Babycenter.com showed three in five women were worried about being able to afford raising a child into adulthood. Below you’ll find four finance-related parenting issues to consider.

Childcare

Childcare costs can be high, although with some research you should be able to find an option that fits your budget. The potential choices include employer daycare or discounts toward childcare, or a nanny-share with other families. Many daycares have long waiting lists so you’ll want to inquire early in your pregnancy. If you plan on hiring a sitter or nanny, give yourself enough time to interview and check references before making a decision. Also, don’t be shy about embracing help from family members.

Many couples decide they’re ready for a baby when one or both have reached a plateau in their careers or are ready for a break. If finances allow, one parent may decide to take on full- or part-time childcare duties or switch off with the other parent by altering work schedules, which will offset childcare costs. You should also check on parental leave policies from your employer, which may allow you to take a set number of weeks off at a percentage of your pay.

Safe and secure

When your baby arrives, he or she will need healthcare coverage from the start. Review your healthcare policy and benefits to see if your current plan sufficiently covers parents’ and children’s needs and is cost efficient.

If you rely solely on public transportation or get around in a two-seat sports car, you may need a reliable vehicle that safely accommodates a child seat for all those trips to the pediatrician and daycare center. Likewise, your living quarters may be perfectly adequate for two adults but may require renovating to make a safe space for a nursery and all the belongings a baby needs. Or you may need to move.

When setting up the nursery, there are a few safety tips to keep in mind

  • Be sure to use a safe, sturdy crib with slats no more than 2 3/8 inches apart.
  • Buy toy boxes without lids, or use models with spring-loaded mechanical arms that won’t come crashing down on your little one’s arm.
  • Keep changing table necessities out of reach of children. Even baby products can be poisonous if ingested.
  • Choose lightweight artwork that can’t hurt your baby if it falls off the wall. Stencils and murals are the safest option.
  • Use water-based paint. Complete decorating in plenty of time to air out the room for baby—and steer clear of fumes yourself.

Daily expenses

Consider your household budget and determine how much in additional expenditures it can absorb. The daily costs of caring for a baby can add up quickly, including diapers, formula, baby food, clothes and all the other accessories. That’s not to mention larger, less-frequent purchases such as a crib, car seat, stroller and highchair.

Your shopping habits might need to change as well. Sticking to a budget means resisting impulse buys like a cute baby outfit or toy you don’t need. It can all be part of a larger lifestyle change for which you may not be ready. For instance, instead of frequenting that pricey market, you may need to switch to shopping at a warehouse club for bulk items or a thrift store for secondhand clothes.

Caring for two generations at once

So many middle-aged adults are caring for aging parents and dependent children that they’ve been coined the “sandwich generation.” According to the American Association of Retired Persons (AARP), 65.7 million adult Americans, or 29 percent, devote 20 hours or more per week to their role as unpaid caregivers.

If you’re a caregiver struggling to manage work and family, Psychology Today offers these suggestions to help lessen the stress and financial strain.

  • Take care of yourself. Get adequate sleep, eat well and exercise.
  • Some states offer programs that allow for federal direct payments to caregivers for certain services. Contact the National Resource Center for Participant-Directed Services (NRCPDS) to find out if you are eligible.
  • If you live far away from your aging parents, providing care may consume even more of your time and money. Think about moving them closer to you. Or visit them when you know they will need you the most, such as for a doctor’s appointment or hospital procedure.
  • Set up a college fund for your children.
  • Talk with your parents early on about securing long-term care insurance.
  • Discuss end-of-life issues with your parents. Although broaching the topic may be uncomfortable, living wills and powers of attorney help guide their future care.
  • Consult a financial planner and an attorney who specializes in elder law to help you navigate laws related to Medicare and Medicaid.
  • Continue to put money away for your retirement.

Document review

If you’re thinking of starting a family, start saving immediately — even small amounts. A nest egg of savings will help lessen the factor money plays in your decision and let you focus more on the personal and life-enriching aspects of having a baby. You’ll also be in a better position to achieve goals that are planned (like a larger home) and those that pop up along the way (like a family vacation).

At the same time, adding a dependent to your family means you need to review or create wills, guardianship rules, retirement plans and life insurance policies. It’s important to update these documents to keep your baby protected from the start and throughout his or her childhood.

You’ll be asked to select your baby’s doctor while you’re still in the hospital. Do your homework ahead of time by asking other parents for names of local doctors and what they like—or don’t—about them. Visit a few practices, find out which ones accept your insurance, and request a brief meeting with the physicians.

Speaking of your child’s well-being, you may want to learn infant CPR. Becoming certified in infant CPR takes about 5 hours, which is an easy commitment before the baby arrives—but you’ll be hard-pressed to find that time once you’re tending to a newborn. Classes usually cost about $50 per person and are offered at hospitals or at local chapters of the American Red Cross or the American Heart Association.

Life insurance is most important when you need to protect the financial security of your loved ones and dependents. Learn about different types of life insurance to get the best coverage for your circumstances.