Monday, 9 June 2014

Five Hidden Expenses that Come with Raising a Family

Learning that a new member of the family is on the way is always a happy occasion for parents. Typically, the conversation is centered on what name to choose, what color to paint the nursery and immediate needs, such as cribs, car seats, and high chairs. However, the best way to consider all of the financial costs for soon-to-be parents is to be aware of the hidden costs for a new baby instead of just the immediate financial outlays. Once the hidden costs are addressed, parents can begin to get a clearer picture of the needed family budgeting.

Medical Bills and the Family Budget

Most couples think that having health insurance covers basics like delivery and vaccines. Unfortunately, there are some policies that don't cover everything. Sometimes, only partial coverage is provided for epidurals and emergency room visits. Surveys have indicated that 39 percent of couples pay more than £600 for medical bills related to childbirth. Although co-pays are usually reasonable for doctor's visits and prescriptions, they can add up to over £60 for each doctor's visit. If a child suffers from chronic ear infections, the medical bills can put a crunch on the family budget.

Dental care for a child can also add to medical bills. Although nowadays you can research and book dentists online to compare prices and find savings, routine check-ups, braces, dental sealants, and extractions all tally up to an extra expense over the lifetime of raising a child. Many parents don't consider this hidden cost of taking care of a child. Prevention is key, though. To help with this, take a look at this kids' dentistry infographic to get an idea of what you can do from home to help your children take care of their teeth before problems arise in the future. Not only will this help them develop good dental habits, but it’ll save you spending a lot of money.

Who's Taking Care of the Baby?

Today, most couples have jobs. Parents need to consider whether or not to use childcare or for one parent to quit working and stay at home to take care of the new baby. Switching from a dual income to a single income is a tough decision for couples. A good way to decide which is financially better is to sit down and do a cost-benefit analysis. Analyze the costs of daycare and factor in the loss of career advancement opportunities. The hidden cost of the loss of career opportunities is often a factor overlooked by most parents, but it's one that needs to be considered. For some, the loss of career advancement opportunities may outweigh the high costs of daycare or hiring a nanny.

The Burden of Higher Educational Costs

The cost of higher education is one that parents cannot escape. When combined with childcare costs, the total cost is 17 percent of household expenses. In addition, college costs are expected rise anywhere from five percent to eight percent each year. Currently, it costs about £24,000 for a private four-year institution annually. In just 17 years, today's costs inflate to a hefty £270,000. To prepare for these hidden costs of child rearing, parents need to start early with a college savings plan.

Technology Costs for Kids

Although bicycles and coloring books are still a part of a child's play stash, technological devices like iPads, computers, tablets, and cell phones are a mainstay in today's world. Cell phones come with monthly usage fees, and computers can be expensive. However, these technological devices are often needed for schoolwork and communication. In addition, game consoles and touchscreens have taken over the traditional action figures and board games. Surveys indicate that more than 36 percent of kids have their own device, and that figure is expected to skyrocket in the near future. Without a doubt, today's children's toys are pricier than yesteryear's toys.

The Impact on the Food Bill

Although babies have small tummies, they can surprisingly boost the family's food bill. Formula and jarred baby food can be pricey. In addition, many new moms are too busy to prepare meals and rely on takeout or prepackaged supermarket meals.  When you're spending £18 to £24 a night on takeout, it can empty the wallet quickly.
The costs of raising a child include many hidden expenses. By taking a good look at the hidden expenses, parents can develop a more exact financial plan for parenthood. With proper planning, parents can eliminate many potential financial woes.

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