The Cost of Raising a Child
Parents today can expect to pay as much as $300,000 to raise a child. It’s an astonishing amount, but when you factor in everything, such as additional housing needs, food, clothing, healthcare, education expenses, and all of the fun stuff, it can add up very quickly. Many parents struggle with child care costs which can run as high as $1000 a month. That amount doesn’t include the cost of college expenses which can add tens of thousands of dollars.
Most young couples feel they are prepared for the costs of raising a child, but it requires strict budgeting that will allow for as much as $1,200 a month in additional expenses. But, expectant parents should be prepared to shell out several thousand dollars even before the baby arrives to cover costs like baby-proofing, building a nursery, purchasing life insurance and stocking up on supplies. And, to be fully prepared, expectant parents should have an emergency fund built up that can cover at least six months of living expenses for loss of income and any number of contingencies that could arise during and after the pregnancy.
Parents do get some relief from the additional tax breaks that accompany a newborn baby. Between the additional dependency exemption, the child tax credit, and dependent care credits, parents can expect to increase their take home pay by several thousand dollars a year. It’s recommended you visit to a tax professional before the baby is born so you can plan your for your after-tax income accordingly.