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financial shocks for parents of newborns | | |
| To cover the cost of that lost
income, Deborah A. Wilburn, author of "For Richer, Not Poorer: The Newlyweds'
Financial Survival Guide" (Perigee, 2005), suggests some advance planning.
"Couples should try saving one of their salaries for several months leading
up to the delivery date," says Wilburn.
3. Child care:
If both parents work outside of the home, they need to be prepared for probably
the biggest financial shock facing new parents -- the cost of child care. Depending
upon where you live, child care expenses can range from $5,000 per year for family
day care to more than $20,000 per year for a live-out nanny. Check
out day care options during the pregnancy and choose one that you are comfortable
with and that you can afford. Check with your employer to see if they offer a
dependent care spending account. Similar to health care flexible spending accounts,
these accounts enable you to pay for qualifying child care expenses with pretax
dollars. You may also be able to claim a child care credit on your federal income
tax return, although, if available, a dependent-care spending account is often
more advantageous financially.
4. Diapers and wipes: The
average baby goes through 10 diapers a day. If you use disposable
diapers, that'll cost you about $2,000 by the time your little one
is potty-trained! If you throw in a wet wipe or two at each diaper
change, keeping your baby's little bottom clean, dry and diapered
will run you about $100 a month. Even cloth diapers can be expensive
if you use a diaper service.
To save money in
this area, you can use cloth diapers and launder them yourself. Jennifer Herrin
of Tulsa, Okla., found it easy to use cloth diapers with her children. "These
days you can buy them with Velcro or snaps and elasticized leg openings so they
fit just as snugly as the expensive disposable diapers," Herrin says. She
washed them at home and saved a bundle. 5.
Formula and/or breast-feeding expenses: The cost of formula shocks just
about every new parent. The general rule of thumb is that a baby needs about 2.5
ounces of formula per pound of body weight per day. | 
