Parents' good intentions set up these financial challenges

Expenses involved in raising children, even before they're ready for college, have skyrocketed. Here's some advice on how to evaluate the options available.

Every parent knows that having kids complicates your financial life. The most recent federal estimate puts the average cost of raising a child born in 2013 until age 18 at nearly a quarter of a million dollars — $245,340 to be exact. And that doesn’t even take into account saving for college.

Your actual cost will vary, of course, according to who you are and where you live. The bottom line, though, is that you’ll need a sound financial checklist when planning for a child. It should address your employer’s family leave policy, as well as anticipated child care costs, health insurance and, eventually, paying for college.

The idea that those kinds of big expenses will come with a child isn’t exactly new to most prospective parents. What does catch many new parents by surprise, though, is the way the “little things” — or what should be little things — balloon into big things. You start out wanting your child to be active and healthy. You end up spending tens of thousands of dollars on coaches and lessons and equipment and traveling team expenses.

Many new parents discover that having a child requires an adjustment in planning and prioritizing. Spending a little time educating yourself, defining your personal values and planning for the unexpected will go a long way toward starting your family on a solid financial footing.

Here are some tips for dealing with three often-unexpected challenges of parenthood.

Overpaying

I was talking the other day with my 3-year-old daughter, Quinn. “But Daddy,” she said at one point, “you’re not a person. You’re a daddy.” Ahhh, I could spend a year just exploring that statement.

She’s right, though. When we think about our children, we tend to lose the rational side of our brain. When my two girls twirl about the room, I imagine them as ballet dancers performing the “Nutcracker.” Bounce a ball, and I see a future WNBA star. This leads us to the current curse of our parenting age — overscheduling, and the way we overpay for every new hobby we imagine our prodigies mastering. Here are some ways to curb this impulse:

• Try free or drop-in classes. Many children’s programs have free days. You can also try to negotiate a per-class or drop-in rate. We have our girls enrolled in a music class. We paid for one child, and each girl attends half time. This reduces our expense and lets us spend the extra time and money on other fun activities.
• Pool community resources. I recently read about a group of parents frustrated with the limited schedule of their local parent-child yoga classes. A group of them got together to hire a private instructor to teach at one member’s home. The flexible plan also turned out to be cost-effective.
• Leverage what you already have: Gyms, libraries and community centers have free or low-cost activities for kids. Join a local parenting group to get a steady stream of good, inexpensive ideas for children’s activities.

Helicopter parenting

Most of my formal education involved science and math. This was great for developing logic and reasoning skills. But I have yet to use logic and reasoning skills in our decision to have children or in raising them.

If you don’t have a degree in early childhood education or child psychology, you are pretty much flying by the seat of your pants. As a result, you can overdo it with private schools, private tutors, personal coaches and traveling sports teams. We would rather err on the side of providing too much support than not enough. This can add up to a hefty bill. Here are a few solutions:

• Get real about your values. Determining what is important to you as a family can help curb some of these impulses. If you know what your core values are, you will always have a set of principles to guide you.
• Talk to a trusted friend: My wife and I obsess about education. We started talking about college the moment we found out Colleen was pregnant (and have hardly stopped since). This is a key value for our family, and we want to do the best thing for our children. But we are woefully uneducated about the best way for kids to learn. Thankfully, we are friends with several professional educators, and they helped us balance our view of education.
• Take a free parenting course: Our health care provider offered free classes on a variety of parenting topics. At first I was skeptical, but I found them surprisingly helpful and informative. This won’t alleviate all your fears, but you will learn a few things and see that you are not alone.

Unforeseen expenses

I met a couple who moved into a house and bought a new car before they had their first child — all in the cause of preparation. Having a child is a wonderful experience filled with hope and joy. But nothing can prepare you for the day you take your newborn home. It’s all unknown. You have nine months when you can’t think about anything else, and it feels like you have to do something. Instead of taking a scattershot approach, try this approach:

• Don’t rush into spending. You don’t actually need a lot of new stuff for babies and small children. And you won’t really know what you do need until after your child starts growing up. So don’t rush out and start spending. As you get to know your child, you will learn what he or she really needs.
• Set up an emergency fund: Take the time before your child is born to put aside emergency funds to handle the unexpected. There is a useful online calculator associated with the federal report on child-rearing costs.

Parenthood is a journey of discovery — and that includes the financial side of parenting. There’s no need to sprint headlong into it. Take things one step at a time. You’ll not only save money; you’ll spare yourself considerable stress.

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