The high cost of having a baby rarely enters anyone's mind when living the single life. If you know that you want to start a family at some point in the future, it is critically important to know all of the costs involved in that decision. Becoming a parent is one of the most magical experiences of life. If you are blissfully ignorant about the expenses associated with pregnancy, birth and child rearing, your pleasure might be shattered by the reality of the real costs of having a child. Depending on your values and your interpretation of what is necessary or what is desired, it is expensive to have a child. The "baby industry" has become big business. Everything for the baby has become necessary, and the costs have skyrocketed. My professional advice is to save and invest as much money as possible while you are single.
It is amazing to observe the growth industries around life events - marriage, babies, honeymoons, education, graduations, birthday partiesâ€¦Certainly marriage and children rank high on the list of expensive life events.
The baby expenses start early. At Gerber Kawasaki we like to educate our clients about the realistic costs of their life choices when we prepare their financial plans. Most people have healthy babies and easy pregnancies. But not every couple can easily conceive a baby and not every baby is healthy. The first and most consistent cost associated with a baby are medical costs. Before deciding to have a child it is wise to understand the expenses involved so that none of the pleasure of pregnancy, birth or adoption is marred by unknown expenses. It is important to know if your health policy covers pregnancy costs. You should review your health plan and switch to a plan that covers pregnancy before you decide to have a child. This can save you $10,000 or more. You should be prepared for the additional costs of becoming a parent if there is a fertility problem.
An unexpected cost, but one that is common today, is the cost of educating couples about pregnancy, childbirth and parenthood. Somehow we got through 6000 years of modern history without taking classes about babies, but it is now a requirement to have videos, books and instruction that easily cost $500 - $1,000.
There is an entire industry devoted to equipment designed to protect a baby. Depending on your assets and inclination, parents need everything from a new car, ideally some kind of SUV, baby furniture, strollers built like mini-tanks, baby seats, high chairs and a baby-proof home. Actually, there is a good chance that the apartment or condo that you now live in will be too small and you will want more space for the new baby. If you bought a home at the beach while still single, there is a chance that the surf and sand, the hard floors, floating stairs and man-cave will morph into a house in the suburbs near good schools.
And then there is the cost of help to keep the family happy. If parents, siblings and spouses aren't available, there are doulas and midwives, nannies, baby sitters and day care expenses. Stay-at-home moms and dads want as much help as working moms and dads - the issue is affordability. The birth of a child also requires planning for pre-school, K-12 and college, music classes, ballet, tee-ballâ€¦
If you build a financial plan, save money and invest wisely when you are single, you will welcome your baby with joy, knowing that you can provide the financial security to pay for the lifestyle you have planned for your family. There are few things as exciting as welcoming a child into your life. Whether you're single, engaged or married, plan now for the future. Gerber Kawasaki can help you.
Gerber Kawasaki Wealth Management
2716 Ocean Park Blvd #2020
Santa Monica, CA 90405
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This material contains forward looking statements and projections. There are no guarantees that these results will be achieved. Investing involves risk including potential loss of principal.