SAN ANTONIO — Are you ready for a baby? Before you decide to become a parent, here are the top five things to consider to make sure you are prepared to handle the permanent, life-changing responsibility.
The cost of having a child is growing every year. According to a study by the Journal Health Affairs, the average out-of-pocket costs of birth and maternal care among women who were covered by insurance increased by nearly 50% from 2008-2015. The amount went up from $3,069 to $4,569 during that time period. The figure does not include the additional cost of how the child is delivered at the hospital.
According to the U.S. Department of Agriculture, the average cost of raising a child through age 17 is $233,610. The USDA says for a middle-income family, the top expenses are housing, child-rearing, food and child care. A local financial advisor says it's wise to review these upcoming expenses, before deciding to become a parent.
“Is one of the spouses not going to go back to work? Because if so, again the budget has to be looked at that angle. So, we've now possibly gone from a two income household to a one income household. The pregnancy can already cost money. But then if you lose an income, it can be that much more expensive,” said Karl Eggerss, senior wealth advisor and partner of Covenant.
A second tip is to check with your employer if your benefits cover maternity and paternity leave. Eggerss said a third tip is to take advantage of tax incentives if you are considering adopting a baby.
“If your modified adjusted gross income is less than about $250,000 per year, you're eligible for a tax credit. The adoption tax credit of $14,300,” he explained.
A fourth tip is to plan for your baby’s medical care. Eggerss said you will have typically between 30 and 60 days to add a dependent to your existing health insurance policy. The last tip is to bump up your savings now.
“Do you expect to receive any gifts after your child? A lot of people give cash as a gift. Start a fund for that child for education right off the bat. I think that kind of ties in to perhaps, having a short term goal before you even decide to get pregnant or adopt. Maybe there's a dollar amount you want to get up to almost like an emergency fund,” Eggerss recommended.
RELATED: Money Smart: Survive a job loss