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Baby Financial Planning


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Having a baby might be the most exciting experience of your life. Waiting for a baby to arrive is a lot like waiting for Santa Claus when you’re a child – you’re full of anticipation!

However, this time can also be a source of stress and confusion about the financial considerations.

There are a lot of things to consider: medical costs, day care, clothing, college, insurance, tax changes, and more. If you weren’t nervous before, you might be now. No sweat! You’re going to find out a lot of what you need to know right here.

Published in: Economy & Finance, Business
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Baby Financial Planning

  1. 1. Financial Considerations For Your Bundle of Joy Baby Financial Planning
  2. 2. Are you ready for a baby? Let’s find out!
  3. 3. How to Save Money on Medical Costs: Prenatal and Delivery
  4. 4. • Know your insurance coverage inside and out. • Build up funds in a Health Savings Account. • Check out local doctors & hospitals in advance. • Look for ways to save on prenatal vitamins. • Request an itemized hospital bill & review it. • Consider alternatives to doctors & hospitals. • Explore using a doula to help with delivery.
  5. 5. Daycare vs Staying at Home with the Baby
  6. 6. Consider your expenses associated with working: Work Expenses Gas Work clothes Lunches out Daycare
  7. 7. How Much Will You Actually Make If You Work? Taxes Income Wages • Know how much you’ll pay. • Compute your take-home pay. • Consider how much you make per hour.
  8. 8. Tips to Save on Baby’s Clothes and Supplies Avoid buying new items. Borrow baby clothes. Shop consignment and used clothing/furniture stores. Breastfeed if you can. Use cloth diapers. Make your own baby food.
  9. 9. Tax Info and Kids: What you Should Know • $3,700 per child at tax time Dependent Deduction • $1,000 per child if you’re single and make less than $55,000 a year. If married, the limit is $110,000 yearly. Child Tax Credit • Varies from 20% to 35% of costs for childcare. Maximum: $3,000. Childcare Tax Credit • $3,092 maximum, based on the number of kids and your income. Earned Income Tax Credit
  10. 10. Financial Planning Before Having a Baby
  11. 11. Predict expenses Examine your budget Decrease unnecessary expenses Start saving now Discuss finances with a financial advisor Increase your sideline income how ever you can.
  12. 12. It’s never too early to start! Saving for College
  13. 13. Tuition, room, and board at a public 4- year college average $15,014/year. At private schools, the number rises to $32,790/year.
  14. 14. It’s exhilarating how much a small investment over time can add up. The key ingredient is TIME! The Power of Interest, Compounding, and Time
  15. 15. Over 9 years: $100 a month saved with 10.5% interest will result in an accumulated savings of $18,700. Over 18 years: The same amount saved monthly, $100, with the same interest of 10.5% results in an accumulated savings of $67,500. This is over 3.5x the amount accumulated at 9 years, yet only twice the amount was saved. Two Examples to Ponder
  16. 16. Ways to Make Saving for a Baby Easier and More Effective
  17. 17. Start a 529 plan. Such plans are arranged through your state to save money now to be used for your child’s college costs in the future. Get a 529 Plan After paying off a debt, keep paying yourself that same amount into your savings. Pay Yourself Set up automatic deposits for all your incoming funds. Auto Deposits
  18. 18. K-12 Education: Private vs. Public The average, independent private school has a tuition cost of close to $12,000 a year. So you’ll need at least $156,000 to cover 13 years, which doesn't take into account the inevitable increase in tuition over time.
  19. 19. Schools vary dramatically in quality. There are excellent and poor private schools. There are excellent and poor public schools. Do your homework to determine the relative quality of your options. Relative Performance of Schools
  20. 20. Affording Private Education
  21. 21. Loans: About 30% of parents use educational loans to pay for high school. These loans are relatively high interest, around 10%. Payback periods can be up to 20 years. Financial aid: Most private schools offer it. Ensure you inquire about it no later than February before the fall your child will attend. Work a second job and put all the money toward your child’s private school tuition. Set up a 9 to 12 month payment plan with the school each year to pay for that school year.
  22. 22. Only you can decide if private school is the best choice for your child. If you’re unable to send your child to private school, don't be too upset! Many of the world's greatest people went to public schools.
  23. 23. Insurance Considerations
  24. 24. • You might want more life insurance for you and your partner, since each of you would be raising the child alone if the other one should die. Examine your life and health insurance policies. • Call your Human Resources about adding a new baby to your health insurance policy at work.If you work… • Check your state’s guidelines for health insurance for children. Most states have coverage for low- income women, children, and families. If you don’t work…
  25. 25. Summary Having a baby and raising him to become a productive member of society is one of the most rewarding experiences you’ll ever have. Before you take the leap to become pregnant, follow these excellent guidelines. If you do, you’ll establish a safe, secure, and enriching future for your child. Plus, you’ll ensure your family lives their best life possible!
  26. 26. Our most basic common link is that we all inhabit this planet. We all breathe the same air. We all cherish our children's future. And we are all mortal. - John F. Kennedy
  27. 27. We hope you enjoyed your Special Report! Curtis Roese is an experienced professional with extensive experience in personal finance and small business matters. Curtis writes and publishes articles, courses, guides and special reports on his personal finance blog. Common Cents Wisdom is a website with hundreds of informative articles, special reports, resources to assist you with all of your financial concerns and a free monthly newsletter. Sign up to receive your free eBook "Common Cents" and get started today on the road to financial freedom!
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