What all parents should know before bringing baby home

(WRIC) — All parents know: raising a child is expensive. For couples looking to start a family, finances can be just as stressful or daunting as bringing a newborn home.

Tera Barry is five months pregnant with a baby girl.

“It’s still surreal.”

Barry will become a mom for the very first time in just a few months. She and her husband still have some things to worry about… and finances top the list.

“The cost of a child is really scary to be quite honest.”

On average, every year, it can cost anywhere from around $13,000 to $15,000 dollars to raise a child, according to “Expenditures on Children by Families, 2013,” the most recent report by the USDA.

“We have our baby fund right here. I would say we’ve saved between $10-15,000.”

It may sound like a lot, but even that won’t last long.

Enter Matt Becker, a father of two and financial adviser who wrote the book, “The New Family Financial Road Map.”

“I wanted to give people a resource that said here’s what you need to worry about, this is it.”

Becker says, first: ignore averages like this one that says the cost of raising a child to 18 is $245,000.

“I mean, they might need childcare… But other than that there are diapers, wipes, basic clothing and then it’s really just love and attention.”

Becker says it’s helpful to estimate baby’s extra monthly cost and start saving that amount before baby arrives, so you can build up a cushion.

Next: Budget without actually sticking to a budget. Becker suggests regularly saving for irregular expenses such as car repairs and having multiple accounts for different needs like saving for a house or an emergency fund. He calls this concept ‘unbudgeting.’

“Automate your savings. Make it happen at the beginning of the month so that you make the same consistent progress towards your goals.”

If you’re in the market to buy a new house or car, he says buying less can mean more savings in the long run. Tera’s family was able to save the majority of their baby money by renting a 4-bedroom house and splitting the rent with roommates.

“They didn’t know we we’re trying to have a baby,” she said. “It really gave us an opportunity to save about 6-months-worth of pay.”

When it comes to saving for college, Becker ‘s family prioritizes retirement, insurance and traveling instead — saying there are other options, like opening a qualified tuition plan.

“If you can save for it, that’s great, but there’s also loans, scholarships and grants, you can pay for it out for your income.”

Above all, Becker says there is no one solution to the right financial path. Each family will have a unique one.

Tera is already mapping out consignment shops and other ways to save, saying it helps her remember that “no matter how much this baby costs, it doesn’t have to break the bank.”

Click here for more information on financial planning for new families or to find out how you can get a copy of “The New Family Financial Road Map.”

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