Budgeting for baby
… and what’s to come

What costs $167,000, is totally dependent on you for 18 years (or longer), and may or may not show any return on your investment? According to the Canadian Council on Social Development, it’s the cost of raising a child until they’re 18.
 
If you’re planning on having a child, it’s time to open a savings account for this purpose. Invest ahead of time to pay for expenses during parental leave when your income is reduced. Of course sometimes the good news comes unexpectedly. In this case, you can still put away some savings; you’ll simply have less time in which to watch them grow.
 
Expecting
Knowing in advance what expenses to anticipate can help you budget more easily. Make a list of all these expenses. Some of the larger ones include diapers, formula, a crib and nursery furniture, car seat, and stroller, along with toiletries, clothing, bedding, and toys.

Factor in child care if you’re planning to return to work. Remember to include the purchase of life insurance and the creation of a will, if you don’t have one.

Live on less

Prepare for a reduced family income due to parental leave. To ease the transition, find out what your maternity leave salary is, and try living on it before baby comes. If you’d like to be a stay-at-home mom, try living on one salary.

Family and friends often want to buy gifts for baby. To get items you really need, set up a baby registry.

First and second year
One of the biggest expenses in a child’s first year is diapers. Cloth diapers are more economical than disposable diapers as they can be reused; however, they involve more start-up costs. Research the options, and see which makes the most sense for you.

For moms unable to breastfeed, formula is also a major expense&watch for sales and stock up. Powder formula is cheaper than liquid formula.

Child care costs
For those returning to the workforce, child care costs are a big, but necessary, expense. Research your options as early as possible, as some out-of-home child care options have waitlists. If you prefer a nanny, you’ll want lots of time to find a child care provider with whom you and your child are comfortable.
 
Third year and beyond
By age three most toddlers are toilet trained which means a big savings on diapers. Your little one is likely growing like a weed, but purchasing brand-new clothing is not necessary since they grow out of them quickly. Look for gently used items at thrift or consignment stores or swap outgrown clothing with other moms.

Recreational savings
If you’re thinking about putting your child in an activity such as a sport or a dance class, check out programs offered at community or recreation centres. These are often cheaper than private establishments. Used sporting goods stores are a great place to shop for used equipment, as are online or newspaper classifieds.

While having a child can be expensive, with a little planning and some money-saving tips, you can reduce your financial worries and invest in your little one with pride.
 

By: Dana Bidnall. Dana Bidnall is a Vancouver writer and the proud auntie of two young nieces.

Source: Blush Issue #3.