Are you welcoming a second (or maybe third+) child into your family soon? If so, it may be time to reevaluate your spending and savings habits. These kids aren’t cheap! The USDA reports that the average cost of raising a kid to age 17 is currently around $233,610. This doesn’t even include the cost of college! And these numbers aren’t going down by any means. In the first decade of the millennium, the cost of raising a child went up nearly 40 percent.
Seasoned parents know the costs associated with children. Diapers, daycare, extracurriculars, all of these items add up to a big chunk of change. You’ve probably already adjusted your budget over time after your first child was born. Is it really all that difficult to do it again when #2 comes around?
With a second kid, you’re looking at doubling your expenses in some areas. While you might not be having any budgeting issues with one kid, no preparing yourself for the second could be a looming disaster for your bank account. With proper planning, affording your second kid is totally doable. Here are some tips to get yourself (and your wallet) ready:
Really Consider Adding to Your Family Before You Commit
If your financial situation isn’t great to begin with, really pause and ask yourself if you can afford to have another child. Can your current home and vehicle accommodate another person in your family?
If you live in a small space, consider having your children share a bedroom to save money that would’ve been spent on a larger home. Are you ready to take the steps to upgrade your living situation? Crediful.com has guides and lender reviews that can help you get started.
If your current vehicle won’t accommodate an additional car seat, or even an added diaper bag or stroller, you may need to upgrade your vehicle as well. If this sounds like something you’ll need to consider, can you afford the extra car payments into your current budget? You’ll need to decide how much you can afford to spend on a car, or if you’ll need to cut corners to fit the vehicle into your budget by buying used.
Don’t Overspend on the Baby Gear
It can be tempting to run out and buy all new, cute baby gear for the second baby, but try t resist. If you have any items left over from your first child, try to reuse them if they are still in good condition. Usually, clothes, furniture, toys, and bigger items such as strollers can be re-used among several children.
For items that need replacement, or if you find yourself needing girl outfits when your first child was a boy, try to be frugal and save here as well. Many families give away gently used items, or you can find them at consignment shops, thrift stores, online marketplaces, or garage sales. Just remember to be sure what you are purchasing is safe. Don’t buy an item that might’ve been recalled or wouldn’t pass today’s safety standards. If you’re buying a car set, check the expiration date and ask if the seat has been in any crashes.
Decide on Childcare
Daycare can be incredibly expensive depending on your location, but there are ways you can make it work. Does it make more sense for one parent to stay home if that’s a feasible option? What about a nanny-share with another family?
If you make the decision to have one parent stay at home full-time, do consider the long-term impact this may have on future finances and career options
Plan for Unexpected Expenses
Something that may not increase in price right away, but will definitely go up later with the addition of another child is grocery and utility costs. Formula can quickly eat into your grocery budget, and will only add more as the baby begins solid foods. You might find that your utility bills also go up by doing more laundry and adding more dishes to the dishwasher.
Start tracking your monthly expenses before the baby arrives. This will allow you to better anticipate and track any changes that you are seeing in your usual expenses. If you’ve already seen how your expenses changed after your first child, you may be able to predict what budget
Create Financial Goals
With your new budget in mind, create financial goals and find ways that you can still save for them. If you don’t have an emergency fund in place, this is one of the best savings accounts you can start. Emergency funds allow you to cover unexpected expenses without hurting your current budget.
After creating an emergency fund, paying off any debts and saving for retirement are also good financial goals to reach for. You can also consider creating college savings plans for your children.
The earlier you start preparing for your next baby, the easier it will be to afford it and still work on your financial goals.