VOL. 131 | NO. 101 | Friday, May 20, 2016
Rays of Wisdom
Dana and Ray Brandon
Family Planning – Beyond the Diaper Fund
By Ray and Dana Brandon
Ray’s Take: So, you’re planning to start your family. Have you considered the finances involved beyond painting a room and knowing it’s going to take a lot of diapers? Three can certainly live as cheaply as two – as long as one of them doesn’t eat or wear clothes.
Parenting is expensive. Whenever the U.S. Department of Agriculture comes out with the average cost of raising a child, it’s always high. USDA data from 2013 reports approximate costs at $245,340 to raise a child to age 18.
Here are some things to think about ahead of time:
Health Insurance. Make sure you have it and understand what is covered so you don’t get surprised. Just because your office visits are covered under the policy doesn’t mean the hospital where the doctor handles deliveries is covered. What about multiple babies or additional medical needs of baby and/or mom?
Have a plan for future expenses like private schools, sports, dance classes and college. Having a budget for these items will make life much easier along the line. And have a plan for cutting back on current expenses like eating out and entertainment to help with the new budget.
Going overboard with pre-baby buying. Yes, your baby will need things. But using good judgment about how much and what you are buying will keep you from overspending. Your baby doesn’t need a closet full of clothes that will be outgrown in a month. Also consider buying gently used car seats, strollers and clothes rather than new ones.
Just like any other decision that will impact your financial situation, it’s smart to go into it with your eyes wide open. The changes that accompany adding a baby to your family can be stressful, but you can reduce the stress by minimizing the financial factor.
Dana’s Take: We live in a society that touts the latest and greatest of everything, and marketers do a great job playing into the emotional desires of expectant moms. Stick with the basics and invest the savings for your child’s future.
In the early 1900s, babies sometimes slept in a dresser drawer and wore cotton diapers and simple white cotton gowns. Those children developed fully without a playroom full of plastic toys or computerized learning games. Maybe retro is the way to go. With concerns about toxic fumes from carpeting and plastics, going minimalist may even be a healthier choice. Decorating a nursery in all white with wood floors can be easier to clean and works for either gender.
Not only can we end up buying too much, we can go overboard too soon. Buying six months ahead can lead to clutter that ends up in a yard sale. Sure, your baby needs stuff, but are you listening to your head or your heart? During the first couple of months, babies don’t need bouncers, swings and a bunch of high-tech stuff. They just need your love and attention.
Ray Brandon, CEO of Brandon Financial Planning, and his wife, Dana, a licensed clinical social worker, can be reached at brandonplanning.com.