Want to Have Kids? Better Plan on These Costs
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You don’t need to be a parent to know that bringing home a baby isn’t cheap: You have to buy diapers, car seats and strollers, plus all new clothes and furniture. And these costs are just a drop in the bucket.

Between housing, food, transportation and everything in between, it costs an estimated $245,340 to raise a kid from birth till his or her 18th birthday.

My own time in the parenting trenches has been a learn-as-you-go experience where finances are concerned—but it doesn’t have to be that way for you. Here are four costs that are easy to underestimate, and some tips to plan ahead like a pro.

1. Hospital Costs

Delivering a baby can inspire a whole new level of sticker shock. According to a 2013 report, the average total cost of pregnancy, delivery and newborn care is in the $30,000 range. (Cesarean sections jack up the figure to $50,000.)

Deep breaths. This, of course, is without insurance.

How much can you expect to shell out personally? The answer varies widely depending on where you live, your insurance, what medical services you receive and how long you stay in the hospital. That said, it isn’t uncommon to owe anywhere from $2,000 to $6,000.

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Keep in mind that you won’t receive one comprehensive bill. Instead, separate invoices—from obstetricians, anesthesiologists, pediatricians and the hospital—can trickle in for months. What’s more, there’s a real chance some providers will be considered out of network. After my first delivery in 2009 at an in-network hospital, I was hit with an additional $400 bill for my daughter’s pediatric exam. The hospital’s pediatrician, unbeknownst to me, was out of network.

The fact that medical fees are so difficult to nail down in advance is why Mary McCraw, a Certified Financial Planner with The Arkansas Financial Group, suggests beefing up your savings as much as possible. “The earlier the better,” she says. How much? Contact your insurance company early on to get a ballpark figure for prenatal visits, delivery and newborn care to help set a savings target.

Also, be sure to clarify their stance on out-of-network providers from the get-go, as these bills can seriously increase your expenses. (And talk with your doctor and hospital about the network status of every provider you may see.) Finally, confirm when your insurance year is up. If it renews during your pregnancy, it means your deductible will reset.

2. Lifestyle Upgrades

Is your home large enough for you plus baby? Plus nursery, stroller and a slew of toys? These may seem like obvious considerations, but they do tend to get overlooked, or underestimated. And they can be even tougher to contend with if your pregnancy comes as a surprise.

Case in point: I got pregnant right after my husband and I spent a boatload of money moving into a teeny, fifth-floor walkup apartment. Needless to say, we were packing up again shortly after, which cost us thousands.

Similar scenarios include having to upgrade to a bigger car, a double stroller, a next-level car seat and so on. What I’ve learned is that having a separate fund for random baby expenses that you add to relentlessly during pregnancy (and after, too) is a fantastic idea that’ll keep you from tapping your emergency savings or reaching for credit cards to cover pop-up expenses.

August 30, 2016

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