Financial tips: Can you afford to have a baby?

When deciding if you’re ready to become a parent, the question of whether or not you can afford to have a baby is an important consideration for many individuals and couples. A blog post on by Amanda Reaume, provides some suggestions for how to prepare your finances for parenthood. They include:

1. Make a baby’s first-year budget

Come up with a general idea of how much everything will cost in the first year.

2. Decide who will stay home and for how long

Determine what coverage you have, and what makes best sense for your family.

3. Have an emergency fund

Financial planners generally suggest having enough money saved to cover three to six months of bills. If that’s not possible, save as much as you can and/or try to secure a line of credit as a back-up if necessary.

4. Get life insurance

Make sure your child(ren) will be adequately covered in case anything happens to you or your partner.

5. Include an education savings plan in your budget

Different countries have different policies on educational savings plans. Put money into the plan every month even if it is a small amount.

6. Factor in tax breaks

Explore what tax breaks are available to parents in your jurisdiction or country.

Read more about the costs of having children here.

Read the blog here.

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