In the US, the 2011 Department of Agriculture study found a baby costs a middle-income family nearly $235,000 to raise to age 17. Kathy Roeser, the Executive Director at Morgan Stanley has some advice for couples planning for a baby.
1. Plan ahead: Don't wait for the baby to arrive before making financial decisions as life as you know it is over.
2. Make a budget: Put together a list of things you need for your child which will help limit overindulging when you are shopping for your new baby. Also, it is important to consider the everyday costs of formula or diapers which can add up quickly.
3. Consider costs of childcare: Childcare can be a huge expense so it is important to research your options and determine what is best for your family and your budget.
4. Start a savings account: Put the money a child may receive as a gift into a savings account. Some grandparents may want to put some money away for the child therefore it is good to have a place to start saving.
5. Start a college savings plan: Consider starting a 529 college savings plan that allows you to invest significant sums of money that can grow tax-free.
6. Review estate planning documents: If you don't have a will, it is time to make one or update the one you do have. It is also important to name a legal guardian for your child as well as naming your child as a beneficiary for life insurance or retirement savings