Most couples understand the importance of saving enough money for a comfortable retirement, but throw a baby into the mix and plans change. If you’ve recently welcomed a baby into the family, you’ve probably added clothing, furniture and diapers to the shopping list but have you thought about life insurance?
A couple expecting a baby needs to make sure that things such as wills, health care proxies and powers of attorney are taken care of, reports the Boston Globe. Balancing expenses for life insurance, retirement and college should be handled with care.
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In fact, a middle-income married couple with two children is estimated to spend more than $230,00 to raise a child born in 2017.
A report from the Department of Agriculture says that number will cover the cost of raising a child from birth through age 17, and if that number is a bit daunting, consider that it fails to account for college expenses.
The report also says a family can expect to spend between $12,000 and $14,000 a year on average to raise a single child.
The biggest drain on the family finances is said to be costs associated with housing – at least for those – and the DOA says that expense will account for nearly 30% of the total cost to raise a child.
Food and child care, which costs parents just over $37,000 per child on average.
The costs of transportation, clothing healthcare and food all ratchet up as children get older. Parents with teenagers can expect to lay out the big money on food, and it’s reported that the annual cost to feed a 15 to 17-year-old adds up to nearly $3,000 a year on average.
Transportation costs take a heavy toll as well, but lower gas prices of late have helped mitigate that cost somewhat.
Term life insurance is an affordable insurance for young parents on a budget. You can purchase for a specific period of time, for example, until your children graduate college, and not be tied to whole-life insurance. According to the Life Foundation, 86 percent say they haven’t bought life insurance because it is too expensive yet overestimate its true cost by more than double.
Even though it’s something no one likes to think about when planning for the joyous occasion of having a child, purchasing a life insurance will ensure that your loved ones will be taken care of when the time comes.