First-time moms and dads deal with a seemingly endless list of obligations, one of which is long-term budgeting. It’s essential, of course, to rework those plans with a growing family in mind. Unfortunately, couples tend to overlook one or more expense categories, an omission that can throw the family budget out of whack at some point in the near future.
What are the most commonly missed costs for expecting parents? In addition to childcare, with its locally unique rates and fees, there’s the long-term line item of college tuition. Dental care, including orthodontic services, should also appear on any complete listing of potential expenses. So should healthcare, home repairs, school-related events, and utility bills. Here are the details about each major category.
Childcare
For those with newborns, one of the single largest budgetary line items is childcare. Indeed, single parents can face substantial monthly charges that rival mortgages and rental bills in size. When both parents work outside the home, the same situation can mean the need to consider all childcare options, including help from family members, an in-home nanny, or a traditional daycare center.
Always take time to research local costs and arrangements at least a few months before the child arrives. Don’t overlook potential add-on fees besides the base price, like supply charges for formula and diapers, closure or holiday fees, and penalties for late pickups. Start by adding a line-item estimate for an average month and be ready to adjust the number upward or downward later.
Orthodontics & Other Dental Services
Maybe it’s wishful thinking that leads couples to forget about oral care when mapping out their family’s financial future. Regardless, dental care that includes routine checkups for kids begins early for the little ones. Later, orthodontics can become a major cost for any family. Additionally, fillings, cleanings, and similar services can come along without warning, which makes preparedness essential. Luckily, concerned fathers and mothers can use dental financing to keep budgets in line and avoid large, one-time payments.
The beauty of a structured plan is that you can apply instantly without affecting credit scores and get immediate treatment for your kids. It’s a smart way to make every dollar work harder, split charges into manageable monthly payments, and prevent small problems from becoming expensive ones. Apply online or ask your provider for their unique application link to get the ball rolling. It’s true that infants don’t need to have braces, but children grow quickly, and even traditional dental insurance policies rarely cover most out-of-pocket fees. Be proactive by signing up now for financing that pays for expenses that personal savings and dental insurance don’t.
College
When the baby arrives, the last thing on a parent’s mind is the high price of college tuition, room, board, and books. But time is the most powerful tool they have, considering compound interest on education savings accounts. In fact, it’s never too early to set up a 529 plan and similar financial arrangements that come with significant tax benefits for mothers and fathers of college-bound youngsters.
It’s an 18 yearlong strategy that, even with modest monthly contributions, can go a long way toward paying for a college education. Title a line item as College Savings and treat it as a standard monthly expense, just like rent, car payments, and groceries. The simplest way to begin is to check the IRS.gov website for details about how to set up a 529 plan. The whole process takes just a few minutes, and you’ll be off to a good start for one of your child’s largest financial obligations.
Home Repairs & Maintenance
More people in the home means more wear and tear on the property. As children grow, it’s no secret that things like marked up walls, frequent use of appliances, and spilled drinks take their toll on even the sturdiest structures. It’s a fact of life that the more kids there are in a house or apartment, the greater the need for frequent maintenance and routine repairs.
That’s the reasoning behind adding about 2% of your home’s total value to a Repairs & Maintenance category when budgeting. Spread that 2% over the whole year to arrive at a monthly figure. Don’t be surprised to discover that most of the repair work is unexpected. That’s common and shouldn’t concern you if you have planned ahead.
Higher Energy Bills
Remember that every additional person living in a home means additional heating and cooling, more laundry, increased use of lighting, and many other daily overhead costs that can add up rather quickly. Avoid being surprised by higher energy consumption by adding anywhere from 2% to 5% to current utility bills.
Make adjustments later as you review monthly budgets. This small buffer amount will take care of most increases, but consider energy-saving tactics as well, like installing a programmable thermostat and water flow regulator if you don’t currently use them. Every little effort pays off in its own way, which is the point of financial planning in the first place.
