Estimated read time: 1-2 minutes
This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
CHICAGO — What costs more? Raising a child or buying a home?
There's no doubt that a bundle of joy brings a bundle of bills. Online calculators will help you anticipate the costs from groceries to insurance to a bigger car.
"All of those things really add up, and it's something you don't think about when you are picking linens for the crib," says Sarah Tims.
Tims is a financial planner and mother of three. Just as "how to" baby books are required reading, Tims says parents need a "financial baby formula." She has a suggested five-step plan:
- Find out what your pay will be while on maternity leave. If it's reduced, live on that lower amount while you're pregnant as a test.
- Save for health care costs — higher premiums and more doctor visits."It could be something between $200 and $300 a month, depending on your premium," Tims says. "And the ‘well baby' co-pays could be anywhere between $15 to $30."
- Research not only life, but disability insurance as well.
- For savings, investigate dependent care tax credits for child care. It's up to 35 percent of expenses with a maximum of $3,000 per year per child.
- Consider a Roth IRA for triple duty savings. Sims says you can take out contributions if you need them for living expenses or emergencies. You can use that money for college without paying a penalty and ultimately it's there for you when you turn 59 and a half and need it for retirement.
Email: kim.vatis@nbcuni.com
