Baby Costs

And you thought the over-the-counter pregnancy test was expensive! According to the U.S. Department of Agriculture, you can expect raising your baby to the age of 18 to cost between $125,000 and $250,000. The college years will cost another $20,000 to $150,000 - and you should plan to have at least forty percent of college tuition saved before your baby has that admission letter in hand.

But first things first. How much is your pregnancy costing? From pregnancy test through delivery, anywhere between $6,800 and $10,600. Your insurance company is picking up much of the tab, but as soon as your baby is born and named, they're your financial responsibility. Their first year will cost about $11,000. If you go back to work, childcare can cost as much as $3,000 to $4,500 in your baby's first year. Clothing and shoes may cost about $600. A stroller, changing table, crib, car seat, etc. cost considerably more: between $2,000 and $6,000. Even diapers add up to a major expense. By the time your baby is toilet trained, you'll have spent at least $1,600 on diapers. And the cost of caring for a baby doesn't diminish after toilet training. Between the ages of five and thirteen, your child's needs and desires for food, clothing, shoes, toys, music and movies, etc. to grow as steadily as the cost of supplying them. You can easily spend an average of $600 a year on extracurricular activities, which is nothing in comparison to the costs of a bigger car and/or house, which you may be buying to accomodate your growing family.

Are you panicking yet? Take comfort! Here are several things you can do to minimize the financial damage a bit:

• If you're able to borrow it, buy it used, or find a generic version, go for it! This does not apply to items whose safety may be compromised, such as with cribs and car seats.
• As much as you may want to give your baby nothing but the best, the less-expensive option is usually just as functional and your baby won't know the difference. Why buy shoes if your baby can't walk yet? Why buy an expensive winter coat he or she will outgrow in a matter of months? And no matter how cute those baby pictures are, the less expensive way of developing them is good enough.
• Spend as much time and energy networking with other parents as you would with potential clients and employers. Fellow parents are great sources of tips, supplies, and savings leads, and they're often willing to split bulk buys, which can add up to big savings.
• Ask your boss if your company offers a flexible spending plan. A flex plan allows you to set aside as much as $5,000 a year out of pre-tax earnings for your child's healthcare.
• You already know to claim your baby as a dependent on your tax return, reducing your taxable income, but don't forget to also claim your $500 per dependent (husbands don't count) Child Tax Credit. This credit is reduced by $50 for each $1,000 over $110,000 you and a partner earn or each $1,000 over $75,000 you earn on your own if you are a single filer and head of household.
• Saving for your child's future is an important matter. Protecting your child's health is just as important. Look into banking your baby's cord blood at birth- where payment plans are available for as little as $50 per month.

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