Congratulations! You are about to become a new parent. Now, your life is going to change and your finances along with it.
Many parents are unprepared for the cost of raising a child. There are many new expenses associated with newborns, from diapers to car seats — and even more expenses to anticipate as your child grows. How are you going to pay for child care? What about summer camp? Is it even possible to save for college?
Budgeting for new parents may seem complicated, but Bankrate has six tips to help prioritize achieving your financial goals. In addition, home equity sharing agreements can help you cover the cost of raising a child — and a service like Unlock, which lets you access a portion of your home equity in advance, could be what you need to manage new expenses, pay off old debt and save for your family’s future.
Costs of being a new parent
How much does it cost to raise a child? Every family’s expenses is a little different, but the average cost of raising a child from birth through age 17 is about $233,610, according to 2015 data from the U.S. Department of Agriculture, the most recent available. The figures, released in 2017, show the cost of raising a child is about $12,978 a year — or $1,082 a month.
Those figures suggest new parents may need to examine how to manage their money. Many young families face significant financial hurdles, including how they’re going to pay for child care or how much money they’ll need to set aside for college. If you’re wondering how you’re going to cover an extra $1,082 monthly expense — not to mention the $233,610 until adulthood — there are simple thing you can do to help foot the bill.
Ways to manage money when raising a child
New parents need a new way of dealing with their finances. Some parents are able to save money for their new baby in advance, but still need help dealing with the challenge of setting aside money for college while saving for retirement. Other parents may be wondering how to balance diapers and debt repayment.
Whether you feel confident about your finances or confused about what to prioritize, Bankrate can help. Want to know how to manage your money while raising a child? Start with creating a budget, building an emergency fund and getting life insurance. Then, you can begin setting aside discretionary income for debt repayment, college costs and retirement contributions. These six strategies can help you prepare yourself — and your child — for whatever the future may bring.
New budget
If you’re raising a new child, you may need a new budget. Budgeting for …….
Source: https://www.bankrate.com/banking/savings/smart-money-for-new-parents/