Financial Planning Puts Baby First

A lot of people want to wait until they can afford children before they have them. The logic is sound, but it’s been said that if you wait until you can afford kids, you’ll never have them. The reason is simple; the costs associated with children are rising all the time. Take education, for example. Education represents a significant annual investment that continues for a minimum of 12 years. And it gets more expensive every year. And we haven’t considered university.

What about something less obviously looming? What about diapers? Unless you’re going the old fashioned route and are going to wash dirty nappies, you’re going to be paying a small fortune every month for at least two years to keep your kids dry.

What about something few parents will want to consider? What about medical costs? Even if your kid only gets the occasional cold or upset tummy, you never know when some sort of emergency will occur, like a broken arm or a burst appendix. And you could very well be among those unfortunate families whose children are always ill or have disorders or disabilities that require constant medical attention.

Think how these costs will spiral for two or three or even four children.

Do you see why if you wait until you can afford them you probably won’t have them?

Enter financial planning 

Most people associate financial planning with retirement, investments and loans. The truth is that you need financial planning if you want to raise children in a sound economic environment.

First things first, if you’re working according to some kind of plan, i.e. you’re getting married in two years’ time and you want kids another two years after that, then now is the time to start saving. Don’t wait until you get married or even worse, wait until the pregnancy is confirmed, or worse still, until your child has her first doctor’s appointment (and you don’t have medical).

Open a savings account specifically for baby. Open two accounts if you want, one for baby expenses and one for university. Put a little bit of money in the accounts every month. Have a direct deposit or stop order so you don’t have to think about it. The accounts are sacred. Don’t touch them.

If your pregnancy is a bit of a surprise, once you’ve gotten over the shock, head over to your bank and get those accounts open.

You don’t need to save massive amounts every month, just what you can afford; every little bit helps.

Remember that mom will be on maternity leave for a few months, which means no income (or considerably reduced income), so you need to be able to weather that. In the US, some insurance policies (short-term disability insurance, according to an article on about.com) cover maternity leave for a few months. It’s a good idea to start investigating as soon as you’re expecting or planning to expect.

If you have medical cover, you’ll need to find out if your plan covers all the check-ups and scans needed during pregnancy, the birth and post-natal and neo-natal care. You’ll also need to find out what red tape you need to wade through to add your child as a dependent.

Accept that you don’t need the biggest, shiniest and most expensive baby kit in the world. You’ll find some lovely bargains at flea markets and fetes. You could go home with a gorgeous wooden cot and matching baby chair for a fraction of what you would pay in a chain store. Homemade blankets and clothes also abound at markets. Remember that the little tykes grow very quickly, so you don’t have to buy designer baby grows and booties.

You will probably never be able to afford a child, not in the way that you think. But with careful planning you can certainly provide for all her needs.