Becoming a parent tends to change one's life perspective drastically. New parents suddenly see the world through a different set of eyes – those of their newborn child. A new parent's focus and priorities immediately shift from "me," or perhaps "me and my spouse," to "my son or daughter."
Of course, becoming a parent brings additional responsibility, including that of providing materially for your new child. This isn't a responsibility to be taken lightly: It's now estimated that the average American family will spend somewhere between $11,000 and $23,000 per year raising a child through the age of 17, or a total of between $187,000 and $391,000. Also, don't forget to tack on another $7,100 for prenatal and childbirth costs.*
With numbers like these, it's not surprising that the size of the average American family has been steadily shrinking and is now down to 3.1 people**. In other words, the average family today has just one child. While there are many factors that go into the decision by many couples to have fewer children (or no children at all), the financial costs incurred in raising a child are no doubt one of the main ones.
However, there are steps you can take to be better prepared for the financial impact of having a child. The key is to begin your post-child financial planning and preparation as soon as possible.
Many new parents fail to plan financially for their new child until the day they arrive home from the hospital, if at all. As a result, they sometimes end up suffering financial harm – for example, by racking up huge credit card bills to pay for new and unanticipated child-related expenses.
It's important to take steps now to help ensure that what should be one of the happiest and most fulfilling experiences of your life doesn't become one that impacts your family finances negatively for years to come.
* Source: U.S. Department of Agriculture
** Source: U.S. Census Bureau