In today’s #LIFTMentorMonday, we talk about the cost of raising a child. Pretty expensive…
I’ve always been skeptical about the reported costs to raise children. At least in my experience and opinion, housing and transportation are not costs that change significantly just because children involved. However, this calculator created by CNN Money and FutureAdvisor shows us predictions on 18-year average expenses for a child born in 1997 (birth year, region, and income bracket can be adjusted here).
Even if you don’t have children now we found some tips to get you prepared for when you decide to expand your family. And even if you are single, in school, or not considering having children, you can get an idea of what it cost to raise you. The first recommendation is to get your financial house in order. Try to build a financial cushion that will cover at least six months of your living expenses. One smart way to accomplish that goal: Sign up for an automatic savings or money market program with a bank or a brokerage or mutual-fund company, and arrange to have a set amount deducted from your checking account every month and placed in the savings vehicle of your choice.
Now is also the perfect time to devise a livable budget, or to fine-tune the one you’ve got. Sit down with paper and pen or a computer spreadsheet and set up two columns: Life Before Baby and Life After Baby. Under the first column, list all of your current expenses, from your mortgage payments to the amount you spend on such incidentals as magazines and gum. Then, follow the same guidelines for the second column, estimating amounts for new expenses, such as diapers, formula, and childcare, and refiguring old ones (for example, your entertainment expenses may drop since you’ll probably go out less). Finally, rework your income figures to reflect how your earnings may be affected by the amount of time you’re planning to take off after the baby arrives. With the hard numbers in front of you, you can then see where you need to make adjustments to bring your income and expenses into balance.
To read more about what you can do to prepare for the costs of raising a child, read the full article by Diane Harris by clicking here.