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(From the Financial Literacy Blog) – Are you a new or aspiring parent? If so, you’ve likely calculated the expenses for delivery, diapers, food, baby clothes, and childcare, but there are many other costs that you might not have considered. According to a report by the U.S. Department of Agriculture, the average middle-income family will spend $12,980 a year on each child. That family would spend $233,640 to raise and care for a child through the age of 18, but that amount does NOT factor in the cost of a college education. It’s no secret that raising a child is expensive, but here are some additional costs you should be thinking about:
Health Care
After welcoming your child, they need to be signed up for health insurance. While health insurance can ultimately save you money on check-ups, routine appointments, and emergency visits, it’s important that you factor in the cost when calculating your expenses. If you have an existing health insurance plan, you can add your baby to your policy. However, a family health insurance plan can be quite a bit more expensive. As of 2020, the average cost for a Maine individual is $513 per month. The average premium for a family plan is $1,200 a month. Beyond health insurance, you’ll need to pay any copays for hospital or pediatrician visits, and you’ll need to consider the cost of nonprescription health care items you may need. These expenses could include teething gel, ointment for eczema or rashes, a thermometer, and more.
Higher Utility Bills
When you bring home your baby, it’s likely that you’ll see a jump in your utility costs. Maintaining an appropriate temperature in your home is essential. If you’re bringing home your infant in the fall or winter, you may end up having to turn up the heat. If you’re bringing home your infant in summer, you may need to invest in some fans or air conditioning to keep your little one comfortable. Either way, you’ll be increasing your energy costs. Additionally, if you’re taking a maternity or paternity leave, all the extra time spent at home can increase costs. Instead of keeping the lights and electronics on only during the evenings and weekends, they’ll be on for the majority of the week. Be sure to prepare for higher utility costs when expecting a child.
Delivery Curveballs
While you’ve likely prepared for the cost of birth and your stay at the hospital, deliveries don’t always go as planned. According to Business Insider, the average cost of a birth with insurance in Maine is $5,947.02. However, that’s a straightforward delivery with no curveballs. A C-section delivery with insurance in Maine costs an average of $9,162.19. The Neonatal Intensive Care Unit (NICU) is equipped with advanced technology and highly trained health care professionals and can help keep your little one in good health in the event of a complication at birth. However, the average cost of an infant in the NICU is around $3,000 per day. If you can, start to build up your emergency fund to help you cover any unexpected delivery costs. If possible, it’s suggested that you have 3-6 months’ worth of expenses saved up for emergencies.
Larger Home and Vehicle
If you’re renting an apartment or living in a one-bedroom home, you may find yourself cramped by all the baby equipment. Plus, there may be nowhere for the off-duty parent to go if they’re trying to sleep or work with a crying baby in the house. You’ll also be surprised by how much space a car seat takes up. A two-door vehicle can make things even more difficult, too. As your family grows, you might need to invest in a larger home and vehicle. Make sure you put some thought into these expenses when calculating the cost of welcoming a child.
As your baby grows older, reach out to your local credit union to learn about youth accounts, financial education, and more!