3 Unexpected Expenses of Raising Kids



It’s undeniable that parenthood is expensive. In fact, according
to a recent Freedom Debt Relief survey 20% of parents say
the cost of childcare was about the same or more than the cost of their rent or
mortgage payments. And in a 2017 study, the USDA estimated that the cost to raise a child born in 2015 is $233,610. Depending on where you live, the number could be even
bigger. 

Raising a child comes with many unexpected costs that even
the best parenting books can’t prepare you for. So to help new parents get
ready to deal with these expenses, we asked our employees to tell us about the
most surprising expenses they had to deal with as a new mom or dad. 

“Make Homemade Presents and Set Up a ‘Fun Fund’”

Maintaining a social life is expensive. After you become a
parent, your social world changes as all of your focus goes towards your
raising little human(s). Before you know it, they’re enrolled in school,
daycare and other extracurricular activities where they start to develop
friendships and form their own social circles. The invites start to roll in and
you’ll soon find that the restful weekend you’ve been looking forward to is
packed with birthday parties and playdates. Your little human’s budding social
life and all of the expenses tied to it (gifts, tickets, snacks etc.) – can
become overwhelming and a drain on your budget.

My tip: Don’t try to do it all. Your quality time with your
children should be your #1 focus – especially if you’re a working parent with
mainly evenings and weekends to spend with them. If you have the bandwidth to
pursue these social activities, then by all means go to a few of them. Allocate
a small budget, or “fun-fund” for your child’s social activities so that you’re
not pulling money from necessary living expenses. Consider making thoughtful
homemade items with your kids and giving them out as birthday presents. Take
advantage of bargains and major sales when buying gifts. Re-gift items if you
find an opportunity to. Maintaining a social life for yourself AND your
children is possible!

Kimberly Ocampo Social Media Content Manager

“Pack Snacks Ahead of
Time”

Raising two boys on my own required various methods of
cost-cutting for some time. I can’t really say I had an unexpected big expense,
more like a lot of ongoing ones. While raising my kids, I had to come up with
ways to shave excess costs but still enjoy life and do the things we wanted.

For example, when we took our yearly trips to Disneyland, I would take boxed drinks and snacks to cut down on expenses while in the park. 

My youngest son’s stroller was like a food cart that allowed
us to avoid the expensive drinks and food they offered there. And since we were
able to cut back on food and drink costs, I was able to use some of my budget
to get each of them a souvenir (at young ages, any trinket made them happy).

My tip: Cutting some corners and a little resourcefulness can go far to help reduce the cost of raising kids.

Shirley HondaVisual Designer

“Understand Your
Insurance Costs Early”

About a week before we were going to have our first child,
we got a phone call from the billing department at the hospital where we had
registered to have Alessandra.

They wanted us to “prepay” the amount that we would owe
based on the insurance that we had. The amount: $4500. A  “lively”
conversation ensued, but I already knew roughly what the birth and the hospital
stay were going to cost. When we found out we were pregnant, I had a
conversation with my insurance carrier about it. 

Just know that you cannot be compelled to pay in advance,
although it may feel like it when the billing department calls you!

My tip:

Have an EARLY conversation with your insurance carrier to
understand what the cost will be based on the hospital you choose.  Most
carriers will send you an Explanation of Benefits (EOB) that you can use to
help map out everything from the prenatal doctor visits to the actual birth
day. This information may prove useful in saving hundreds, if not thousands of
dollars.

Once you have that information make sure to save into a
Health Savings Account. This tax-advantaged account can be used to pay for
current or future healthcare expenses. When combined with a high-deductible
health plan, it offers savings and tax advantages that a traditional health
plan can’t duplicate. 

Michael MichelettiDirector, Corporate Communications and PR

Take Care of Your
Kids—But Don’t Forget About Yourself

The greatest challenge today in raising kids is navigating and balancing their future and your future. While some traditionalists would say that as parents we should sacrifice for our children, there is enough data to suggest that we as parents should strike a better balance to ensure we are saving enough for retirement while still meeting our obligations to our dependents. It is also crucial that we teach our kids about money early on, so that they can do the same. 
The post 3 Unexpected Expenses of Raising Kids appeared first on Freedom Debt Relief.



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