Finanically Ready for Children

Regina394268 · December 2013

Hello fellow Bumpies!

My husband and I are 41 and 43 respectively and are trying to conceive for our first little one. Besides the normal health insurance and the nursery stocked well with supplies, what other finacial considerations should we be planning for the short term and long term.

FemShep · December 2013

In addition to PP's response:

Short-term disability insurance (without pregnancy exclusion for you if you can find it)

Long-term disability insurance

Educational expenses

Definitely do not overlook retirement savings. You and your child can borrow for college, you can't borrow for retirement, and that's going to be a more immediate concern for you than for many parents.

Ducktale · December 2013

Besides just the increase in health insurance premiums, be prepared for large medical bills from L&D. Some people get away with hardly any bills, some people pay thousands.

Copays - kids get sick a lot

Estate Planning/Wills

Additional Life Insurance

More minor stuff but if you want to be thorough, clothes (both maternity and post-partum), increased utility bills (laundry and being home more during a maternity leave).

Longer term, other than the obvious formula/diapers for babies, and food, clothes, etc for older kids, the costs of activities can add up (along with equipment for those activities)

And totally ditto what @FemShep said about retirement. Never neglect retirement. Having children have to worry about helping pay their parents bills in retirement is a huge burden, give them the gift of getting yourself financially secure for your future.

kerbear135 · December 2013

One thing I didn't plan for- a new vehicle. My old car's air went out (we live in the south where it gets way too hot for a baby to be in a car with no ac) while I was pregnant and it would have cost more to replace it than the car was worth - so if you drive an older vehicle, be prepared to have to replace it while in the middle of all the other baby-related expenses

lifeonthehill · December 2013

kerbear135 said:

One thing I didn't plan for- a new vehicle. My old car's air went out (we live in the south where it gets way too hot for a baby to be in a car with no ac) while I was pregnant and it would have cost more to replace it than the car was worth - so if you drive an older vehicle, be prepared to have to replace it while in the middle of all the other baby-related expenses

I second this. My car hopefully has twhree or four years left in it but either ay it is an upcoming expense and we don't have a solid plan to start saving for one but we really should.

SmileyJay · December 2013

What everyone else said

At 43/45 hopefully you started 20 years ago on retirement so that is just a part of normal budgeting and you don't notice any difference.

Re: car - plan for the unexpected with a little cash set aside. For us this is a $5K emergency fund aside from usual savings and $ for pregnancy/baby expenses. We always want to know we have something stashed away just in case the A/C blows, a pipe busts, a tree falls, the car breaks down, or we have to make a trip to the ER, etc. You never know what could happen and for us $5K gives us a little sigh of relief. I know it's not a ton of money and we have other savings, but that is our untouchable emergency stash.

Our personal feelings are to plan for retirement before planning for kid's college. They can take out loans just like we did and work through college, but we don't want to saddle them with caring for us in our old age. Not to mention, we want to be able to provide for ourselves. I may feel differently once a kid is in the picture though.

The main one I can think of is daycare if you plan to use it. That will run us about $900/month in a low cost of living area. So basic baby stuff, about 30 hours of daycare/week, and increased insurance is going to put us paying around $1500 a month extra from what we currently are used to. That's a big chunk of our income and we are thankful we started living below our means a long time ago so that it is even a possibility without needing assistance.

bugandbibs · December 2013

kerbear135 said:

One thing I didn't plan for- a new vehicle. My old car's air went out (we live in the south where it gets way too hot for a baby to be in a car with no ac) while I was pregnant and it would have cost more to replace it than the car was worth - so if you drive an older vehicle, be prepared to have to replace it while in the middle of all the other baby-related expenses

Yup. We knew we would need a larger vehicle before we had a 3rd kid and that DH's car was aging fast. We saved approximately what the car payment would be on a new minivan for 18 months and bought one for cash. We don't do consumer debt, so being able to plan ahead meant I got a great "luxury" minivan without touching our e-fund.

barefootbluejean204 · December 2013

Healthcare will be the biggest monthly expense along with daycare I believe. I have researched it and family insurance alone will run us about $520 a month - thats almost our mortgage payment

SmileyJay · December 2013

@barefootbluejean204 - this is us, too. Not sure of your particular situation but ours is not the best. We both have 100% paid through employers for our selves but not a dime towards family plans. We have a $300 deductible and pretty much everything paid in full. Our employers pay $750 a month towards our individual plans.

BUT - to add just one baby (or 10) it would cost us $700 a month. That in addition to daycare and other baby expenses is just not doable. When I found out, I cried thinking there is no way we can have a baby. Also, according to our state health programs, we would need to have 5 children to qualify for reduced rate care through ALL kids. Ridiculous, like we are millionaires or something.

So we called up BCBS and found out we will be able to get a good plan covering just the baby for about $150/month. Totally doable for us. I don't personally know anyone who can afford $1450 a month for insurance which would the the actual cost of my current plan with family coverage if my employer did not pay the $750. Granted, it is one of the more expensive plans with a low deductible and high pay out. But, still. The cheaper ones would still be $1000/mo.

I have my fingers crossed that next year our employer will just hand us $1500/mo cash to purchase our own plans on the healthcare exchange. A platinum level plan for both of us and 1 child would be $800 a month including dental and vision.

barefootbluejean204 · December 2013

@TheCraftyKoala Thanks!! I did not know you could add only a single coverage for a minor. I will have insurance with my parents until I turn 26. My hubby is on single coverage with BCBS and it runs $200/mo with $45/mo with dental.

klpadayachee · January 2014

I was suprirsed at how many incidental expenses really do come up with your first child particularly as they move through clothing sizes about every 3 months the first year. New carseats as they grow out of the infant carrier, a second stroller (one for jogging/walking and a smaller travel stroller for travel/shopping).

Also, I second the need for a review of all your insurance with a professional, in particular life and disability insurance. As soon as that child arrives it's not just about taking care of yourself and your spouse, but you need to plan for the unexpected in light of raising a child. Most people workplace coverage is not sufficient for family needs. Start college savings right away, you can set up an account even before baby is born and schedule an auto pay. One less thing to worry about after he/she arrives. Best of Luck!

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